Public Utilities Their Fair Present Value And Return

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25x, and that for the fourth year . 75z. Thereafter the net income would be x.
When the assumptions have been put into this form, the determination of the cost of the property as a going concern is simple. In order to reproduce the property under consideration $102, 000 would be required from the stockholders, $5000 for promotion costs, $95, 000 for purchase and construction of physical property and a cash expenditure of $2000 to defray the expenses during the first year of operation. This $200
...0 is a known portion of the costs included in the group "going value. " The other costs to be included in this group will be found from the following calculation. In order to make the discussion of this calculation as simple as possi- ble, it will be assumed that the money required to pay the necessary cost of property can be obtained as required.
CALCULATION OF COST OF PROPERTY AS GOING CONCERN YEAR End of Paid for promotion costs $ 5, 000 During 1st, Paid for plant 50, 000 End of " Return on $5000, 1 year @ 6.


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