Overcharge the current generation of customers

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Reference no: EM1378203

It is sometimes claimed that to add depreciation among the expenses and to give money out of earnings to retire bonds that were used to finance the acquisition of assets being depreciated is to overcharge the current generation of customers. Through retiring the debt, the customers are paying for old plant, and through depreciation charges they are paying for a new plant. Is this claim correct? Describe.

Reference no: EM1378203

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Overcharge the current generation of customers : Retiring the debt, the customers are paying for old plant, and through depreciation charges they are paying for a new plant. Is this claim correct? Describe.

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