Price Maintenance

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1913 edition. Excerpt: ... Some firms have stated that they were under trifling expense, and when rent was mentioned have said, "What? Rent! Why, we pay no rent! We own the building. Of course, we charge off taxes and repairs to the expense account, but we have a great advantage over competitors in that respect, for they must ... Read More

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1913 edition. Excerpt: ... Some firms have stated that they were under trifling expense, and when rent was mentioned have said, "What? Rent! Why, we pay no rent! We own the building. Of course, we charge off taxes and repairs to the expense account, but we have a great advantage over competitors in that respect, for they must pay rent." Surely, if they would not have occupied the building it would have been rented at market prices, and in our opinion they should charge off every year the amount which they could secure for the property if it were rented to another party, probably 8 per cent. on the market value and repairs and taxes and water rent. Interest on Monies Invested. Charging interest on capital being a mooted question, it is probably well to present some of the various phases of the subject, as follows: One may readily secure the curinterest on renj. rae Q interest on capital by in Capital. vesting in securities of such a character as to preclude any appreciable chance of losing the principal. What a person expects to gain who embarks in business, superintending the employment of his own capital, is much more than the rate of interest. The rate of profit should be far in excess of the rate of interest. The first and prime duty of the business, therefore, is to earn the current rate of interest. This should be without regard to dividends, for Unjust Claims, Unexpected Losses or Depreciation Would Soon Wipe Out Such a Narrow Margin. See page 244. a sale is really made at less than cost, if not equal to or in excess of the invoice cost plus operating expenses, including interest on capital. If interest on capital is included when making up the cost, and the year is not a good one, the dividends will at least be guaranteed if sales have not been made at less... Read Less