174 VALUATION, DEPRECIATION AND THE RATE-BASE 
because the interest on the remaining value plus the annual de- 
preciation is no longer constant in amount. 
TABLE 10. COMPARISON OF RESULTS 
TaE SINKING FUND, EQUAL ANNUAL PAYMENT AND UNLIMITED LIFE 
METHODS 
When consideration is given to the requirements for periods determined 
either by probable life or by the actual life of articles. 
FivE-YEAR PROBABLE LIFE. NUMEROUS ARTICLES 
Failures as noted in the text — 6 per cent interest 
. Unlimited 
em driest Sinking Fund Method. Equal Annual Payment Method. | On Eh d 
ii iti : 2 = 
100 of orig. Tonti ; 
pe invest. = Wh Amort. fr Replace- 
beginning 2 Lin Si during __ mentre 
of year prob, lic Mhactal Sie prob. life. A | Z quirement 
$100.00 $17.74 $17.74 $17.74 $17.74 $15.10 $ 4.00 
2 4.00 18.45 T7.74 19.51 18.66 17.46 8.16 
HER 19.89 17.7400 022.13 19.3% 19.63 | 12.65 
1 12.65 22.13 17.74 25.72 20.09 17.30 17.64 
. 17.64 25.26 17.94 30.40 19.89 10.40 ' 23.34 
) 23.34 11.66 17.74 12.63 19.64 20.30 21.97 
‘ 21.97 0 14.85 17.74 16.32 19.69 20.60 21.16 
: 21.16 17.37 17.74 10.11 19.34 2I.IO 20.54 
2) 20.54 18.58 17-74 20.98 | 20.41 19.70 19.73 
10 19.73 19.95 17:94 21.46 20.44 18.30 18.31 
For comparison with the Sinking Fund Method and the Equal 
Annual Payment Method, there are noted in the last column of 
Table 10 the annual replacement requirements, which are the 
amounts to be provided if the Unlimited Life Method of pro- 
cedure is adopted. By the plan of amortizing the cost of each 
article or for providing a fund for its replacement in the exact 
term of its probable life, there will be a rapid accumulation in 
the replacement or depreciation fund, or a rapid amortization of 
capital in the early years, which is an undesirable feature of 
operation. To find the necessary earnings by each of the several 
methods, interest on the capital remaining as an investment is to 
be added to the amounts noted in the table.