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.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter I. Introduction and general notes

Collection:: Economics Books

6 VALUATION, DEPRECIATION AND THE RATE-BASE against the land whether under this name or under the name of “water right,” or otherwise, might be agreed to, such that the capital remaining in the canal enterprise, as a proposition apart from the land, would be reduced to a reasonable amount. If neither of these alternatives are adopted the canal venture may be permanently unprofitable, from the standpoint of present owners. This will be the case when the rates that would yield interest on the investment are in excess of the value of the service rendered and cannot be supplemented by a participa- tion of the canal owner in the unearned increment which the construction of the canal has brought to the land owner. As another illustration a railroad may be considered which was primarily constructed for the development of a tract of land or for the development of mineral or timber resources. There can be no question that when considered from the broad standpoint of the advantage to society the construction of a railroad under such circumstances may be justified. When this railroad begins to serve the public and the freight tariff and passenger rates are to be fixed, these may have to be established on the basis of the fair value of the service rendered without any attempt to make the earnings yield interest on the capital invested in the road, or suitable consideration may have to be given to the fact that a part of the investment was made for the benefit of some special enterprise such as a rock quarry or a lumber business and should not have been charged to the road at all. These limitations upon the use of an appraisal as an element for consideration in fixing rates are fully recognized, but these and other limitations are not such as to detract from the de- sirability of referring to and using appraisals under ordinary circumstances. Basis for Sale Price — Business Enterprises. — Everyone who engages in a business enterprise must know: The cost of the article in which he deals at the time the article is sold. The cost of the plant such as buildings, roads and equipment

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