An expository note on depreciation and p
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Richard Schmalensee
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Article
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1989
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Springer US
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English
โ 322 KB
This note provides a simple, general proof that if a regulated firm is allowed to earn its actual (nominal) one-period cost of capital on the depreciated original cost of its investments, and if actual earnings equal allowed earnings, then the net present value of all investments is zero for any met