[X120CAS], Letter from Frank Julian Sprague to Edward Hibberd Johnson, November 18th, 1889
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Title
[X120CAS], Letter from Frank Julian Sprague to Edward Hibberd Johnson, November 18th, 1889
Editor's Notes
In estimating the present direct value of the Sprague Company's business, and leaving out all consideration of it as a rival, all provit at the EMW over and above a fair interest on the capital necessary for manufacturing the Sprague apparatus should be crediteed to the Sprague Co., plus any profit on its regular business, and plus any losses due to imperfect workmanship of such character as would be eliminated if the manufacture were under our control. This last is an uncertain, although considerable amount. The Company has turned the scale, and although handicapped by present manufacturing charges, is making money. ## The present monthly bills at the EMW average $100,000 of this, at least $25,000 is clear, safe profit. The capital necessary to provie for our manufacture would be about $50,000 20% would be a liberal allowance for the manufacturing investment, or $100,000 annually. ## The present annual provits on our work, at least $25,000 monthly, would be $300,000, which, with $100,0000 off for return on invested capital would give $200,000 as the presenet net profit (manufacturing) which should be credited to the value of the Sprague Company's business, or over 14% on our outstanding capital. ## The present rate of profit being made by the EMW onSprague apparatus, $25,000 monthly, is equal to a divident of 6% on $5,000,000. ## How does this compare with the total outstanding full-paid Edison General Stock?
Author
Recipient
Date
1889-11-18
Type
Folder/Volume ID
X120C-F
Document ID
X120CAS
Publisher
Thomas A. Edison Papers, School of Arts and Sciences, Rutgers University