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 IV. Essentials of value

Collection:: Economics Books

ESSENTIALS OF VALUE 3 of the amount of general expense, of the cost of management, engineering and supervision of the expenditures due to unforeseen conditions, of unprofitable expenditures, and of losses by acci- dent, that would ordinarily be anticipated in the execution of similar work under the same general conditions. The finished plant if constructed under better than average conditions is entitled to a credit due to this favorable circumstance, and if constructed under adverse conditions, may not be entitled to an appraisal at full actual cost. The determination of the allowance which should be made for overhead expense is therefore a matter of considerable im- portance as will be seen from the quotations presented here at some length, which will give a fair idea, based upon experience, of the actual overhead expense connected with many public enterprises. The Special Committee of the Am. Soc. C. E. on the Valuation of Public Utilities is Cited on Overhead. — In reference to en- gineering as an overhead expense the Special Committee of the American Society of Civil Engineers on the Valuation of Public Utilities in the progress report which it submitted in January, 1014, Says: Am. Soc. C. E. Committee, Engineering. — “ Under the head Engineering are usually included not only strictly engineering expenses, but those of other technical employes and of inspec- tors. It is difficult to draw the line between the preliminary engineering and that during construction, and it is probably best in most cases to include the part of the preliminary engineering expenses connected with the preparation of the final design of the works with those incurred during their con- struction. “The percentage of the cost of the work represented by engi- neering differs with the character of the works and with the amount of care and skill exercised in their design and con- struction. On railroads it is commonly estimated that the engineering cost will amount to 5 per cent of the physical valu- ation of the property, exclusive of overhead charges. Statistics of the cost of engineering are available in connection with several municipal and other works as follows: 4% 9,

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