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#2 - Mr. Wm. R ein h a rd t November 1 5 , I9 6 0 In summary form the results for the forecasted year 1950 are: Present Rates Investment Cost Original Cost Present-Day Cost i <!? f Revenues #222,000 #222,000 #222,000 Expenses 221,013 231,110 269,348 I Net Revenue (\v 987 (9,110) (47,348) Rate Base 579,700 666,800 854,900 Rate of return 0.17$ None None ( ) Red figure. t§§| It is thus seen that not only will the Water Depart­ment of the Las Vegas Land and Water Company fail to earn a fair 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 nnoet armeovunetn uef ori s rejtuusrtn .slightly more than expenses with practically A 6 ^ -return has been used as reasonable in determin­fionrg 1t9he5 0 dearfei ciase ncfoyl lionw se:arnings. Such deficiencies as developed With Federal Income Tax Rate of 38$ InvCeossttment Original Present-Day Cost Cost Est’d. Gross Revenue needed #279,450 #298,328 #355,520 w M " under Present Rates 222,000 222,000 222,000 Deficiency in Gross Revenue # 57,450 # 76,328 #133,520 Per cent increase needed 25.88 34.38 60.14 With Federal Income Tax Rate of 45^6 Est'd. Gross Revenue needed #295,988 #316,307 379,495 ” ” M under Present Rates 222,000 222,000 222,000 DPeefr iccienetn cyi ncirn eaGsreo ssn eReedveednue $ 733,39.8383' 42.48 11577495 V 70.94