MISSING LINK IN PRICING: A FAIR RETURN ON INVESTMENT

Assuring an adequate return on investment has always been a problem in railroading--and even defining the adequacy of return has excited constant discussion. A.L. Scott, director and chairman of the finance committee of Burlington Northern, expresses his opinion on the need of an after-tax return of 12% or more to satisfy the needs for a capital-hungry railroad industry. The ICC has stated its goal is an industry return of 6% although it has actually not been higher than 4% in over 20 years. Scott notes that not only is the industry unable to recover the cost of fixed capital but is not even doing this for new capital being committed to the business.

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  • Corporate Authors:

    Simmons-Boardman Publishing Corporation

    508 Birch Street
    Bristol, CT  United States  06010
  • Publication Date: 1974-7-29

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  • Accession Number: 00080882
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Feb 27 1975 12:00AM