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 I. Introduction and general notes

Collection:: Economics Books

14 VALUATION, DEPRECIATION AND THE RATE-BASE necessary allowance for operating expenses including a proper allowance for anticipated future replacements but should not always immediately be allowed interest on the full cost of this extension which, as already stated, together with other im- provements such as street grading, paving, sidewalk and sewer construction will be included in the price charged by the owner for the lots and will therefore represent a contribution by this new section of the municipality to the cost of the privately owned water-works. In some measure a donated extension to a water-works system, as here used for the purpose of illustration, bears a similar re- lation to the plant, as does property held for future use in excess of the capacity of the plant, with the difference that in the one case the public donates the property to the owner, in the other, the owner secured the same by investing his own capital. In the fixing of rates the increase of capital due to the receipt of gifts and donations should generally be considered separately from the actually invested capital. Individual cases will arise requiring special treatment. The owner in most cases will not be entitled to as large a return on this donated capital as on his actual investment. 2. The above case is not materially different from that of the municipality which needs water-works but cannot afford to make the necessary expenditures. To induce the investment of private capital in a water-works enterprise, the offer of a bonus is made. To avoid legal restrictions this has sometimes been done through the medium of extra large annual payments extending through a number of years for the water required for street sprinkling, for sewer flushing, for extinguishing fires and other municipal uses. Whenever a direct or an indirect con- tribution is thus made, the owner’s invested capital — the rate- base — is not necessarily represented by the cost of the repro- duction of the entire water-works. Fair Value as a Rate-Base. — In concluding this introductory chapter attention may be called to the accepted view of the courts in the matter of valuations for rate-fixing purposes. It

Access restriction

Copyright

fullscreen: Valuation, depreciation and the rate base

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation