POSSIBLE PROCEDURES IN FIXING RATES 
By the Equal Annual Payment Method, if the 
amortization allowance be continued during 
probable life, the original investment should 
have been reduced (so-called accrued de- 
preciation) by about......... _....... 48 per cent 
By the Equal Annual Payment Method, if the 
amortization allowance be continued during 
the actual useful life, the original invest- 
ment should have been reduced (so-called 
depreciation) as follows: 
a. According to the plan 4 of estimating 
the annual allowance by about. .... 18 per cent 
b. According to the plan B of estimating 
the annual allowance by about. .... 21 per cent 
By the Straight Line Method, the original in- 
vestment should have been reduced by 
ghoul..." rN - -B 33 per cent 
By the Unlimited Life Method there would be 
no reduction of the invested capital and 
there would theoretically be no accumula- 
tion in the replacement fund. 
Rental Value as an Aid in Determining Present Value. — 
Rental value is a convenient aid in forming a clear conception 
of present or remaining value of any item of property. Take, 
for example, a high-duty pump and assume that the same be 
rented by Smith, the owner of a water-works property, from 
Jones on such terms that Jones will recover the cost of the 
pump during its life and interest on his investment. The care 
and the maintenance of the pump falls upon Smith. The 
rental value may be so determined that as the business grows 
the return to Jones of capital will be increased, but ordinarily, 
the pump being assumed to be in full service all the time, the 
rental value remains uniform throughout the period that the 
pump renders efficient service. If the interest rate agreed upon 
is 6 per cent and if it be further agreed that the probable life 
of the pump is 25 years, Jones will expect $7.82 per annum 
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