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pghquest, Repairs which extend the useful life are considered capital expenditures..worldwide, and in full accordance with GAAP. Those are the type of "rebuilds" I am referring to. Not ordinary, non life-extending repairs.
No one is questioning if thats an option, the question is why are companies now choosing to bank their "record profits" rather than invest and expand, thus increasing new equipment.
If the economy was recovering like the left likes to proclaim the stock market indicates, then companies would be buying new equipment to fill up new factories, thus reducing the median age of equipment.
making repairs, doesnt increase capacity, its pretty much maintaining status quo, which would indicate a lack of expansion. All you did was cite an example of the economy not growing.
They can still depreciate rebuilds which extend useful life internally, although they forgo some tax benefits, but not buying new until absolutely required freed up capital that this same corp used to add machines for new product offerings, adding new jobs.
It's called budgeting. Not all of us max out our spending like children. Some carefully decide where to invest. This ex employer, btw, went from 400 mill rev/year to 2 billion in 10 years, some growth via acquisitions, without adding a penny of debt.
They can still depreciate rebuilds which extend useful life internally, although they forgo some tax benefits, but not buying new until absolutely required freed up capital that this same corp used to add machines for new product offerings, adding new jobs.
But they cant keep the old equipment while increasing capacity, and thus NOT investing. Your examples are actually proving the OP's premace
Quote:
Originally Posted by bobtn
It's called budgeting. Not all of us max out our spending like children. Some carefully decide where to invest. This ex employer, btw, went from 400 mill rev/year to 2 billion, via acquisitions, without adding a penny of debt.
Companies always did that. Simply changing who owns the equipment through acquisitions though, doesnt increase capacity. It might improve your corporate capacity but the capacity existed previously and was just combined.
Because demand can be meet without more investment. But actually they have just perhaps not like past.Some things take so long its better to renovate what you have to avoid cost not known. We haven't for example build a new refinery because no one can know the end cost or how long to get thru regulating agencies. But they have massively expanded existing refineries. The XL pipeline proposed shows the problem
Those new machines are still in use, and they are selling more than they ever have, at the plants they always owned.
By the time I left late last year, 20% of revenue was from products only added in the last 5 years. This remains an incredibly well run organization. They will be a bigger power for generations to come. 2 bill, privately owned.
Because demand can be meet without more investment. But actually they have just perhaps not like past.Some things take so long its better to renovate what you have to avoid cost not known. We haven't for example build a new refinery because no one can know the end cost or how long to get thru regulating agencies. But they have massively expanded existing refineries. The XL pipeline proposed shows the problem
LOL, I'm sure getting a refinery built in China is a breeze by comparison. And America continues to wither in the economic winds...
Everything in America seems to be deteriorating while other countries are building supermodern cities. Meanwhile, the corps get to brag that we are "doing more with less"...
Those new machines are still in use, and they are selling more than they ever have, at the plants they always owned.
By the time I left late last year, 20% of revenue was from products only added in the last 5 years. This remains an incredibly well run organization. They will be a bigger power for generations to come. 2 bill, privately owned.
You are completely ignoring the conversation taking place.
You just said you bought up other companies, so simply buying up other companies, thus increasing your companies sales, doesnt mean the overall demand of items have increased, it just means that they are now seeing sales that would have gone to the previous businesses. In fact you are choosing NOT to buy new equipment because there isnt increased demand for your products.
Its like suggesting people are buying more food because they chose to shop at store A, who seen their sales increase, rather than store B, who seen their sales decrease.
its ridiculous. Its almost impossible to have a conversation with you because you are micro discussing the issue that's intended to be discussed on a macro scale, using examples that dont even prove what you are claiming, in fact it validates the argument being made by the OP.
We multi-tasked, some growth organic, some acquisition. Most in the US, although the ultimate parent is in the EU.
We prided ourselves on being innovative, hence 20% revenue from new product lines.
PS: YOU caused the digression. I've simply been answering your off-topic questions.
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