Accession Number:

AD0652609

Title:

CONSTRUCTION-EQUIPMENT POLICY: INFLUENCE OF INCOME TAX LAW ON ECONOMIC LIFE.

Descriptive Note:

Final rept., May 65-Jul 66,

Corporate Author:

STANFORD UNIV CALIF DEPT OF CIVIL ENGINEERING

Personal Author(s):

Report Date:

1966-09-01

Pagination or Media Count:

36.0

Abstract:

The purpose of this study was to examine the influence of the income tax laws on the mathematical model. The two principal influences of the tax laws on the economic life of construction equipment are 1 the prohibition against using double declining balance depreciation for an equipment life of less than three years and 2 the stipulation that a piece of equipment should not be depreciated below a reasonable salvage value. Equations have been developed to substitute straight line depreciation for lives of less than three years and to recapture income when the asset has been depreciated more than a reasonable allowance. The conclusion of the report is that income tax problems can be treated in the computation of economic life by digital computer. By modifying the algorithm in Technical Report No. 61 with the equations developed in this report, the analyst is provided with an added tool for determining the economic life of various types of construction equipment.

Subject Categories:

  • Economics and Cost Analysis
  • Operations Research
  • Construction Equipment, Materials and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE