Is there an economic term for getting a ton of use out of something with little investment? Lets say a car you pay off quickley but lasts for 200000 miles. I was thinking utility but doest utility imply enjoyment?
ag318pun
Favorite Answer
A new car costs over $20,000 and you take good care of it,
it should last you 200,000 miles. Buy a diamond ring for
$20,000 that has a 3K stone, over 20 years it will still be worth
that much or more. Valuation
John W
Depreciation?
Utility is used to evaluate risk and used to be called "moral utility" to reference how "rational" human judgement differs from expectations in many cases. That's why they always have the slice of pizza example where the 100th slice of pizza has much less value to you than the first slice. They may also have the example of a $100 bill meaning very little to Warren Buffet but if it's all you have, it's very valuable to you. It's this last part that is about risk. Look up Bernouli Risk to see how utility is used for risk.
?
The borrowing part you would call gearing or leverage; you borrow the money over a long period and the payments get cheaper (through inflation) yet you keep getting value out of the asset (car).
Leasing: you pay money for the car just for the use you get out of it (say 2-3 years) but don't buy the whole asset.
Depreciation? Bargain?
Don't know , your question is a tad muddly!
Anonymous
I think your valuation grow 20 times in every 10 years you can calculate your wealth yourself.