Expected revenues do not come into the equation. You are buying a piece of equipment. What you do with that piece of equipment is your business/problem.
If you install a pay phone (remember those?) inside Grand Central Station, you can expect it to make much more money that if it were installed outside the Podunk Drugstore. It is still the same piece of equipment, and has the same marker value.
Also, other manufacturers are not pertinent. How much an item holds its value requires a complex analysis. The percent of the original value of a Rolls Royce has very little to do with the percent of original value of a Kia, yet they both perform the exact same function.
Point 1 and 2, the cost of the payphones may be the same, but the values of the locations just went down because the cost to purchase the payphones was higher than what would have been if the contract was honored, the difference being the damaged amount??Expected revenues do not come into the equation. You are buying a piece of equipment. What you do with that piece of equipment is your business/problem.
If you install a pay phone (remember those?) inside Grand Central Station, you can expect it to make much more money that if it were installed outside the Podunk Drugstore. It is still the same piece of equipment, and has the same marker value.
Also, other manufacturers are not pertinent. How much an item holds its value requires a complex analysis. The percent of the original value of a Rolls Royce has very little to do with the percent of original value of a Kia, yet they both perform the exact same function.
Point 3, comparing a RR to a Kia is very extreme, but if you compare the depreciated percentage cost of a Kia to a Caddy or Benz, after 5 years you will find the percentages to be very similar, if you purchased a Pontiac Aztek you're screwed.
I am under the impression comparing similar assets sold in the same type of market is a standard way to value assets, please let me you don't think that valuation technique applies here.