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

66 VALUATION, DEPRECIATION AND THE RATE-BASE “In a computation of going value according to Alvord’s method the going value is the present worth of the amounts by which the net earnings of the comparative plant are less than the net earnings of the existing plant during the entire period from the date of the first preliminary work until the earnings of both plants are equal. . . . The loss to capital invested in the comparative plant is not to be measured by the extent to which its earnings during the construction period fall short of the net revenues of the existing plant, but rather by the amount by which they are less than the returns which have been foregone in order to enter the new field of investment. . . . The detailed computation of the cost of developing the amount of business necessary to yield a reasonable return upon the property in- volves a number of further assumptions which make the ac- curacy of the result very questionable.” Franchises and Related Matters The Franchise Value. — Any privilege or right granted by legislative authority to engage in a particular business is a fran- chise. Whenever the franchise or privilege to do business is an ex- clusive privilege and grants some latitude in the matter of the charges which may be made for the service rendered thereunder, it is an element that can be valued. It is well stated by the Supreme Judicial Court of Kennebec County, Maine, in in- structions to appraisers that its value ‘“ depends upon its net earning power present and prospective, developed and capable of development, at reasonable rates, and the value to be assessed is the value to the seller and not to the buyer.” When the value of a franchise is in question, all circum- stances that affect the earning powers of a property must be taken into account and by an analysis thereof the excess of the carnings over a fair return on the capital invested in physical properties must be determined. This excess of earnings when capitalized will give some idea of the total value of all intangible elements and may lead to the determination of the franchise value. Frequently, the only stipulation in the franchise in the matter

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