Operating costs 1 are percentage labor costs

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Unformatted text preview: perating Costs 1. Are percentage labor costs unaffected by increase in volume in the early years? 2. Wages generally increase faster than inflation. Does Reliable expect continuing productivity gains to offset this? Overhead 1. Is “overhead” truly incremental? Depreciation 1. Depreciation is not a cash flow, but the MACRS deprecation does affect tax payments. 2. ACRS depreciation is fixed in nominal terms. The real value of the depreciation tax shield is reduced by inflation. Interest 1. It is bad practice to deduct interest charges (or other payments to security holde...
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