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#2 - Mr. Wm. Reinhardt November 15, 1950 In summary form the results for the forecasted year 1950 are: Present Rates Investment Cost Original Cost Present-Day Cost Revenues #2 2 2 ,0 0 0 #2 2 2 ,0 0 0 #2 2 2 ,0 0 0 Expenses 221,013 231,110 269,348 Net Revenue 987 (9,110) (47,348) Rate Base 579,700 666,800 854,900 Rate of return 0.17$ None None ( ) Red figure. It is thus seen that not only will the Water Depart­ment of the Las Vegas Land and Water Company fail to earn a air return on the capital employed in rendering the water service, but it will fail to earn its costs of operation be­fore any return. In other words, Its operations are estimated to be in the red for 1950 and future years, irrespective of the capital base used - except for the Investment basis wherein net revenue is just slightly more than expenses no amount for return. with practicallyJ ^ ,, , £ return has been used as reasonable in determin-fionrg 1t9he5 0 daerfei ciase nfcoyl lionw se:arnings. Such deficiencies as developed With Federal Income Tax Rate of 58# Est’d. Gross Revenue needed n under Present Rates Deficiency in Gross Revenue Per cent increase needed With Federal Est'd. Gross Revenue needed " M I under Present Rates Deficiency in Gross Revenue Per cent increase needed Investment __ Cost Original Cost Present-Day Cost #279,450 #298,328 #355,520 2 2 2 ,0 0 0 2 2 2 ,0 0 0 2 2 2 ,0 0 0 # 57,450 # 76,328 #133,520 25.88 34.38 60.14 Income Tax Rate of 45$ #295,988 #316,307 379,495 2 2 2 ,0 0 0 f 73,988 33.33 2 2 2 ,0 0 0 # 94,307 42.48 2 2 2 ,0 0 0 fl57,495 70.94