The nature of capital and income

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Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

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APPENDIX TO CHAPTER XIII 389 on January 1 and half on July 1, six months later, and that, as before, each element of the stock remains one year before sale. The cost on January 1 is 3 and on July 1 is also 3 If we take inventory on July 1, the stock just purchased rep- resents a value , while that purchased six months before, and V4 which is to be disposed of in six months more, may be taken as having a somewhat greater value, namely, oY 1+, the latter being the cost value plus interest, or, what amounts to the same thing, the expected selling value less interest. The total stock is therefore worth on July 1, — ru Oh bude cts ot 2 V1 -+ 2. The sales or receipts from the stock will evidently be every six months 5 (1471), this being the accumulated value for one year of the amount purchased, z. For the entire year the receipts will thus be just double, or ¢ (1 +¢). If from this we deduct the per annum cost, ¢, we obtain, as before, the net income, ¢i. The ratio of this net income to the capital- value taken on January 1 or July 1, of any year, will therefore be, — ci stsviTi 2 1+ vii seems no longer to be equal to the rate of interest; but the dis- crepancy is due to the fact that the merchant’s income accrues semi-annually, whereas i is reckoned annually. If we substi- tute for i its value in terms of i/, the rate of interest reckoned This expression, which is evidently the same as 3'2 . . semi-annually (namely, ¢'+ : , as shown in the Appendix to Chap. XII, § 2), we shall find, on simplifying, that the above expression reduces to i. In other words, in the artificially simple case in which the merchant is supposed to accomplish

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