Valuation, depreciation and the rate base

Bibliographic data

Monograph

Identifikator:: 174667931X

URN:: urn:nbn:de:zbw-retromon-119897

Document type:: Monograph

Author:: Grunsky, Carl Ewald http://d-nb.info/gnd/10180959X

Title:: Valuation, depreciation and the rate base

Edition:: 2. ed., revised and extended

Place of publication:: New York

Publisher:: Wiley

Year of publication:: 1927

Scope:: X, 500 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VI. The effect of non-agreement of actual with probable life upon the determination of the depreciation or replacement requirement

Collection:: Economics Books

ACTUAL AND PROBABLE LIFE TABLE 3. EXPECTANCY The probable life of each article is 10 years or periods. For terms other than 10 years, each year in the table may be regarded as a period equal to one-tenth of the probable life term. (Based on the special hypothesis of failures as explained in the text) For 10,000 articles. Single article. Year or period, Remaining num- Remaining service Expectancy at Number of ber of articles at years at begin- beginning of year failures. beginning of year. ning of year. or period. 100 10,000 100,000 10.0 200 9,900 90,000 9.09 300 9,700 80,100 8.27 400 9,400 70,400 7-46 500 9,000 61,000 6.77 600 8,500 52,000 6.12 700 7,900 43,500 5.51 8oo 7,200 35,600 4.95 goo 6,400 28,400 4.44 . 1000 5,500 22,000 4.00 x 9oo 4,500 16,500 3.67 8oo 3,600 12,000 3433 . 700 2,800 8,400 2.00 i 600 2,100 5,600 2.67 500 1,500 3,500 2.33 1 400 1,000 2,000 2.00 fp 300 600 1,000 1.67 18 200 300 400 1.33 19 100 100 100 1.00 20 Oo o CG oO Merit of the Assumed Law of Failures. — Although, under the hypothesis of failures on which Table 3 is based, there may still be considerable departure from the actual number of fail- ures in any year, there can be no question that this hypothesis is, as already stated, a much nearer approach to the truth than the other hypothesis heretofore generally accepted as a basis for calculation, that each article will fail theoretically at ex- actly the end of its probable life term. The last column of Table 3 shows that on the hypothesis as explained, an article which has a probable life when new of ten years will, if it is still in service and in good condition at the beginning of the tenth year, have an expectancy of four years and at the beginning of the fifteenth year, its expectancy will still be 2.33 years. I0Q

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