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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IX. Possible procedures when the rates for a public service are to be fixed

Collection:: Economics Books

194 VALUATION, DEPRECIATION AND THE RATE-BASE only or that failed for any reason to fulfill their intended purpose. The cost records are not always dependable and they may have to be either entirely disregarded or largely supplemented by cost estimates. Recourse may be had in such cases to the cost of reproduction as a means of approximating the amount that may reasonably be assumed to be properly invested in the property. In making the estimate of the cost of reproduction it is not advisable to use the prices of materials and labor momentarily prevailing but rather the average for a consider- able time period, preferably about 5 years. Tabulation of Field Results. — The results of the field exami- nation, including a classified enumeration of the physical items that go to make up the property, should be tabulated in con- venient form on sheets which will show in appropriate columns information about as follows: 1. The year of installation. 2. The age. >», The probable life new. +» The expectancy or estimated remaining years of service. The cost to reconstruct, itemized. . The sub-totals of (3). 7. The contractor’s profit. 8. The totals of (6) and (7). 9. The allowance for overhead expenses. 10. The total investment, estimated as the sum of (8) and (9). 11. The residual or scrap value. 12. The present value, in per cent, computed from (3) and (4) (sometimes called condition per cent). 13. The remaining or present value in dollars (computed from (10), (11), and (12)). 14. The accrued depreciation (10) — (13). 15. The current rate of depreciation (computed from (3), (4), (10) and (11). It will be noted that according to this tabulation the cost to reconstruct and the residual or scrap value are considered when

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