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

56 VALUATION, DEPRECIATION AND THE RATE-BASE In re Purchase of the Oshkosh Water-Works plant (Sept. 17, 1913) the City estimated 1o per cent for engineering, superin- tendence, interest during construction, contingencies, etc., this on the physical plant not including general equipment. The Commission allowed 15 per cent and said: “ Tt will be noted that the valuation recently placed on the Oshkosh Water-Works property contained an item of 15 per cent for engineering, superintendence, interest, organization, etc. It will also be noted that the report of the previous valuation only contained 12 per cent to cover these items. It should be stated that this change from 12 to 15 per cent represents the results of an extended study of the costs of such work and it is my opinion that where the actual costs are not known for such a property as the Oshkosh Water-Works, 15 per cent of the cost of specific construction represents about a fair amount! for these overhead charges.” In re Application Manitowoc Gas Co. (Dec. 4, 1913) the Commission allowed 15 per cent exclusive of contractor’s profits which should be included in the separate cost items. In re Investigation Ashland Water Co. (July 10, 1914) the Commission allowed 15 per cent. Promotion Expenses Promotion Expenses. — There is an additional class of ex- penditures incurred in connection with many of the public service and some private enterprises which has a more remote connection with the cost of these enterprises than the overhead or the cost of developing the business. Capital is timid and needs guidance. Preceding nearly every investment of capital in the development of an enterprise of any magnitude the same has been in the hands of the promoter whose investigations and efforts are supposed to have been directed to a unification or combination of properties that will make them available as the basis for the enterprise. The reward to the promoter should ap- pear in the enhanced value of the unified property when com- pared with the cost of the individual items that go to make it up. But this is not all that there is to promotion expense.

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