Motor Road Transport For Commercial Purposes
(Liquid Fuel, Steam, Electricity)

CHAPTER XIX INTEREST ON CAPITAL EXPENDITURE AND DEPRECIATION—SPECIMEN TABLES In continuan.ce of the subject of motor road transport, it should be pointed out that before a Schedule of charges can be kept it is necessary to examine the various items of expenditure, and to settie upon a system which will afford a sound basis on which to make future calculations. This remark, of course, refers especially to standing charges, and it is proposed to mention hele such matters as Interest, Depreciation, Insurance, and the like. Calculation of Standing Charges. The first matters for present consideration are Interest on the Capital outlay and Depreciation of the vehicle. These two naturally come under the head of standing charges. There are two different methods of calculating these amounts ; the first to be dealt with is that whereby a fixed percentage of the initial Capital figure is taken annually over a term of years. Thus suppose a vehicle—whether driven by petrol or steam or electricity—cost £1,000 when new, and that the life of the machine be taken at eight years (which is not unduly optimistic since there are vans running to-day with more than ten years’ service behind them), the charge for interest on Capital of £1,000 at 6 per cent, will be £60 per annum. Depre- ciation at 12| per cent, will be £125 per annum. (As a matter of faet, it should be taken less tyres, and also battery in the case of an electric.) It will be seen that at the end of eight years the