Abstract :
FROM STUDIES of the mathematical aspects of the three most important and interrelated elements of Fixed Charge rates in terms of Original Cost, namely: return, depreciation, and those taxes which are directly dependent upon such return and upon the treatment accorded depreciation in their computations, it has become evident that the heretofore advocated technique of levelization of their basically variable nature with time is only a special case of much more fundamental considerations. Furthermore, in the conventional approach, some of the individual components of the total rate of Fixed Charges do not describe properly their own economic significance. The formulas which were developed by the new approach, however, express each individual component in a manner descriptive of its own economic nature.
