Moens–Korteweg equation: Difference between revisions

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In [[economics]], '''depreciation''' is the gradual decrease in the economic [[value theory|value]] of the [[capital stock]] of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question. If capital stock is <math>K_t</math> in one period <math>t</math>, investment is <math>I_t</math> and depreciation <math>D_t</math>, the capital stock in the next period, <math>K_{t+1}</math>, is <math>K_t + I_t - D_t</math>.
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==Models==
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In economics, the value of a capital asset may be modeled as the [[present value]] of the flow of services the asset will generate in future, appropriately adjusted for uncertainty. Economic depreciation over a given period is the reduction in the remaining value of future services.
 
Under certain circumstances, such as an unanticipated increase in the price of the services generated by an asset or a reduction in the [[Annual effective discount rate|discount rate]], its value may increase rather than decline. Depreciation is then negative.
 
Depreciation can alternatively be measured as the change in the ''market'' value of [[capital (finance)|capital]] over a given period: the market price of the capital at the beginning of the period minus its market price at the end of the period.
 
Such a method in calculating depreciation differs from other methods, such as straight-line depreciation in that it is included in the calculation of [[implicit cost]], and thus [[economic profit]].
 
Modeling depreciation of a durable as delivering the same services from purchase until failure, with zero scrap value (rather than slowing degrading and retaining [[residual value]]), is referred to as the '''light bulb model''' of depreciation, or more colorfully as the [[one-hoss shay]] model, after a poem by [[Oliver Wendell Holmes, Sr.]], about a carriage which worked perfectly for exactly one hundred years, then fell completely apart in an instant.<ref>{{cite web |url=http://stats.oecd.org/glossary/detail.asp?ID=1904 |title=OECD Glossary of Statistical Terms - One-hoss shay |accessdate=2007-10-02 |format= |work=}}</ref>
 
==National accounts==
[[File:AbschrUSAJBRDengl.png|thumb|[[Consumption of fixed capital]] in percent of [[GDP]], [[Economy of Germany|Germany]], [[Economy of Japan|Japan]], [[Economy of the United States|United States]], computed from data of [[Ameco]] data base.]]
In [[national accounts]] the decline in the aggregate [[Physical capital|capital stock]] arising from the use of fixed assets in production is referred to as [[consumption of fixed capital]] ('''CFC'''). Hence, CFC is equal to the difference between aggregate [[gross fixed capital formation]] ([[Gross (economics)|gross]] [[investment]]) and net fixed capital formation ([[net investment]]) or between [[Gross National Product]] and [[Net National Product]]. Unlike depreciation in business accounting, CFC in national accounts is, in principle, not a method of allocating the costs of past expenditures on fixed assets over subsequent accounting periods. Rather, fixed assets at a given moment in time are valued according to the remaining benefits to be derived from their use.
 
==References==
{{Reflist|2}}
 
 
 
[[Category:Economics terminology]]

Latest revision as of 23:47, 11 November 2014

You have the likelihood of fantastic benefits, each fiscal and private, in terms of controlling and running a house company. Sadly a lot of people aren't sure the way to recognize these incentives. In relation to managing a home based business, you would like to understand around you are able to and apply reasonable advice to the best of your wrap car skill. Here are a few beneficial pointers.

Be sure you bridegroom and attire for work, irrespective of where you happen to be doing work. Developing this routine will help get you in to a fruitful frame of mind at the start of every single operate session. It also indicates, you will be able to perform company outside the house with a moment's notice.

In case you are considering starting up a property enterprise, you should operate in an industry that you are searching for. The greater number of exhilaration you sense about what you are actually undertaking, the greater invested you will certainly be in working hard to help make your company an economic and private accomplishment.

Be quick when writing the goal of your own enterprise. Be sure you include the intention of the business, along with any goals you might have for doing it. These few phrases ought to permit men and women really know what tends to make your small business exclusive and what its desired goals are.

Prior to deciding to endeavor in a property-structured business, ask yourself why you want to start a company. Your factors may well involve: you want to become your individual employer you want to convey your very own ingenuity you want to supplement your wages or, it may be others. Your reasons behind seeking to start a business will influence your decision on what type of company you start.

When you are willing to form your small business, take into consideration what legitimate actions you have to take. You will need to make a decision if you want to develop your organization like a only proprietorship, collaboration or firm. Your small business will need a certificate or allow, to be able to run. Dependant upon the kind of company, you will need to obtain unique insurance policy. Being sure that you tackle all of the legalities, will guard both you and your clientele through the lawful misunderstanding.

Search the internet to find the supplies you need for your home business at wholesale cost. The world wide web has an abundance of referrals for buys similar to this, and you will discover competitive prices in the items you want. The organization permit you may have will provide you with the ability to acquire materials at wholesale.

Produce a mailing list for your residence company. This will be either via snail mail or maybe the online. Enable other individuals understand about any promotions you happen to be supplying or just advertise your business. You may also mail out modest up-dates or notifications in your customers to inform them what is occurring. This can get more traffic to your site.

Hopefully with all the current helpful info you found out about online business you're already forming approaches to make your personal good results scenario. Remember that the information in this article are only a small fraction of all the that there is to find out, so keep looking for more info. In the event you apply all of that you understand with diligence and perseverance, then your home business can prosper.

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