306 NATURE OF CAPITAL AND INCOME [Cmar. XVII

will normally be at the zero point at both ends. This
is shown in Figure 16. Such a curve shows the normal
cycle of capital-value from the moment when the article
of capital is first utilized to the moment when it is ex- 



 

Fra. 15.

hausted. It is “normal” in the sense that the income is
just sufficient to compensate for the outlay, no more and
no less, and that usually the principal items of outgo all
occur in the early part of the cycle, and the principal
items of income all accrue in the latter part. In such a

 

 

 

 

 

A
Fic. 16.

normal curve the capital-value (AB in Fig. 16) at any
moment may be said to represent two things: first, it represents
 the discounted value of the future expected income
(less that of future expected outgo, if any); and, secondly,