AS wrote:
> http://www.calumetphoto.com/item/HA1503/?a=CM01
>
> Price of a new small car!!
>
Oddly enough, businesses buy all sizes and sorts of vehicles all the
time. Equipment is evaluated on a cost-benefit basis. If the additional
income and/or cost savings exceed the cost, the purchase is justified.
Capable manager/owners make analyses that work out more often than not
and stay in business.
> After they get "out-dated" - what happens?
>
With any luck, they have more than paid for themselves and the operating
and maintenance costs. From an accounting standpoint, they have been
depreciated. Again, with competent management, the life for book
depreciation purposes (which may vary from tax) has approximated actual
useful life, and it is sold or dumped with little effect on the books.
Obsolescence for a business is based on the ability to get the job done,
not what's latest. So many pieces of equipment in many businesses are
productive long after they are out-dated and written off. Some can be
extraordinarily profitable at that point.
I suppose you would have been shocked to hear what a large company I
worked for paid for a custom overhead, 4x5 copy camera over 20 feet
long, camera room, darkroom, custom designed giant rear projection
display system and the large amount of space and remodeling to
accommodate all this stuff. Then they liked it so much that they bought
and installed about 20 of the room size viewers in Division offices.
Monthly operating costs were well above the cost of this little camera
whose price shocks you.
When the way that part of the business operated changed and technology
marched on, all that stuff was dumped. Seemed a shame to me, as I had
conceived and directed its creation, but it had done its job well for
maybe 15 years. From an accounting standpoint, it all had zero book
value by then, my primary operator was able to retire and we found
another job for his assistant. La, la, la, la, life goes on.
You did say "seriously", no?
Moose
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