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 II. Definitions

Collection:: Economics Books

DEFINITIONS the same kind, as for example telegraph poles, be recorded it will be found that a few fail almost immediately, being destroyed by storms, by fire or by accidents, that a larger number will fail within a few years due to inherent defects in the timber and other causes in addition to the causes of failure already named, that failures will multiply at some period such as 10 to 15 years according to the character of the timber of which the poles are constructed and that some will survive many years beyond the average life term of all. From such records the probable life term of a new pole is ascertained; but while this probable life, here synonymous with average life, is known or can be ascer- tained as explained, the actual life of individual poles will depart therefrom more or less. The total number of service years of the poles which fail early will fall short of the expected total number by as many service years as those of the poles which survive the probable term will exceed this number. Expectancy or Remaining Life. — The expectancy of any article is the probable time, usually expressed in years, during which it may reasonably be expected to render efficient service. For a new article the expectancy is its probable life. When the life of a candle which will burn for a number of hours is under consideration, the expectancy is ascertained by subtracting age from probable life new. But in all ordinary cases the expectancy cannot be ascertained by any such simple mathematical process. Every article which has been in service for some years, and has escaped the accidents which might have put it out of business in its early life, stands a better chance of being among those which will outlive the probable life term fixed for it when it was new, than it had when new to outlive this term. Consequently the expectancy is not to be determined by subtracting age from probable life. It is to be determined from the actual con- dition of the article and all local circumstances which may affect its continued usefulness. A high-duty pump, which originally had a probable life of 25 years, when it reaches the end of this term, may be in a con- dition almost as good as new. It has escaped the possible acci- 21

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