Public Utilities Their Cost New And Depreciation
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By "uniform" it is not meant that the 150 PUBLIC UTILITIES same total amount should be placed in reserve each year, but that there should be set aside a uniform percentage of the wearing value of the plant as it is found to be after additions to the plant or removals of abandoned plant have been properly entered as positive or negative fac- tors in the plant account.
If the depreciation reserves are invested in outside securities, the interest on the reserve funds is paid not by the public but ...by those having the use of the money. Moreover, the amount paid by the public as an annuity to the reserves would be uniform and (if 8 per cent could be obtained for such money) would be the amount shown as the annuity in the above table.
Thus it is seen that, provided the straight line method is used when reserves are invested in plant and the sinking fund method when reserves are invested in outside secu- rities, the percentage of the wearing value of the plant to be set aside each year is uniform in each method but that the annual payments to the fund for renewals are larger when the straight line method is used than when the sinking fund method is employed.
What to read after Public Utilities Their Cost New And Depreciation?
You can find similar books in the "Read Also" column, or choose other free books by Hammond Vinton Hayes to read onlineMoreLess
To quickly assess the difficulty of the text, read a short excerpt:
By "uniform" it is not meant that the 150 PUBLIC UTILITIES same total amount should be placed in reserve each year, but that there should be set aside a uniform percentage of the wearing value of the plant as it is found to be after additions to the plant or removals of abandoned plant have been properly entered as positive or negative fac- tors in the plant account.
If the depreciation reserves are invested in outside securities, the interest on the reserve funds is paid not by the public but ...by those having the use of the money. Moreover, the amount paid by the public as an annuity to the reserves would be uniform and (if 8 per cent could be obtained for such money) would be the amount shown as the annuity in the above table.
Thus it is seen that, provided the straight line method is used when reserves are invested in plant and the sinking fund method when reserves are invested in outside secu- rities, the percentage of the wearing value of the plant to be set aside each year is uniform in each method but that the annual payments to the fund for renewals are larger when the straight line method is used than when the sinking fund method is employed.
What to read after Public Utilities Their Cost New And Depreciation?
You can find similar books in the "Read Also" column, or choose other free books by Hammond Vinton Hayes to read onlineMoreLess
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