MANUFACTURING PLANT APPRAISAL The method of appraising manufacturing plants depends somewhat upon the purpose of the appraisal. When making an appraisal for a prospective buyer, the appraiser will naturally decide upon a comparatively low range of values, knowing that the expert retained by the owners will decide upon the upper range, and vice versa. It may be impossible to determine absolutely the value of a machine, and the variation of a few dollars, one way or the other, might be equally justifiable under certain conditions. If the appraisal is made for the owners for purposes of taxation, accounting and insurance, it is well to take average values. Terms used in Appraisal Work. The meaning or definition of terms used in appraisal work and a brief explanation of the underlying theories are given in the following: Unit Plant: A unit portion of the plant equipment. Replacement Value: Actual cost of replacing a unit plant with one of the same type at prevalent market prices at time of appraisal. The replacement value, then, is the market price of the machine plus freight plus cost of installation In the case of large machine tools, the freight and installation items are large enough to be worth considering, especially when expensive foundations are necessary. When appraising small parts of machinery and small tools, these items are practically negligible when considering individual tools, but in appraising the contents of a tool-room, where large quantities of tools have been purchased in bulk, some allowance should be made for freight. First Cost Installed: The original cost of unit plant at market prices prevalent at the time of purchase of the plant under consideration plus freight and cost of installation. The "first cost installed" can often be obtained directly from the books of the business. Scrap Value: The actual cash return brought by the sale of materials (iron, copper, etc.) used in the construction of a machine or tool at current market prices, less cost of junking. The cost of junking will be high in the case of large and unwieldy machines, and in some cases will offset the return from sale of scrap, making the net scrap value zero or even a negative quantity. Depreciation: The lessening in value of unit plant due to (1) wear and tear; (2) age and deterioration; (3) inefficiency and inferiority in design. Depreciable or Wearing Value: The replacement value of plant less the scrap value. Depreciated or Present Value: Value of unit plant at the time of appraisal. Present value equals the replacement value less the accrued depreciation at time of appraisal. Replacement Value. The determination of the replacement value is simply a matter of applying unit prices to the machine or tool in question with proper additions for freight and installation. A careful check of unit prices is, of course, necessary to ascertain their accuracy at the time of the appraisal. The increased costs of material and labor have caused a marked rise in the prices of some of the larger machine tools within the past decade. In the case of small machine tools, prices, in many instances, have decreased within the past few years. Present Value. The computation of the theoretical present value can be most easily done by applying an annual rate of depreciation directly to the wearing value and subtracting the result from the replacement value. The wearing value equals the replacement value less the scrap value. The scrap value has a definite ratio to the replacement value for each type of plant. The reciprocal of the life of a machine or tool gives the rate per cent which, when applied to the wearing value and multiplied by the age in years, gives the accrued depreciation. This latter subtracted from the replacement value gives the present value. The present value can be obtained directly by applying the following formula: Present value: a (l-f) + fb where a = replacement value; b= scrap value; f = age of machine; = 1 = life of machine. After the present value has been obtained by either of the methods outlined, allowance should be made for the actual condition of the machine or tool in question, as ascertained by careful inspection. For example, two drill presses of the same make and size, recently installed, are operating side by side. One is found to be in excellent condition while the other has a table badly mutilated by careless operators. Obviously, the accrued depreciation on the second should be greater and the present value less than on the first. It is in cases of this kind that the appraiser's judgment comes into play. Average Life of Equipment. The following list of average lives of various types of machines includes all three of the items given in the definition of depreciation, i.e. (1) wear and tear; (2) age and deterioration from natural causes; (3) inefficiency and inferiority in design. If item (3) were not considered, the averages would be considerably higher. Large Machine Tools. life, twenty-five years. Small Machine Tools. (Boring mills, planers, engine lathes, etc.) Estimated (Lathes, small drill presses, shapers, bench tools, etc.) Estimated life, twenty years. Small Parts. fifteen years. (Jigs, chucks, fixtures, etc.) Estimated life, fifteen years. Motors and Electrical Equipment. — Estimated life, twenty years. Belting. Estimated life, ten years. Depreciation of Machinery. The amount to be deducted annually from the Appraising Patterns and Drawings. — The proper method of appraising patterns and drawings is a subject regarding which there is considerable difference of opinion among appraisers. A detailed inspection of patterns is not feasible unless the manufacturer is willing to have the superintendent, or some official equally well informed, go over the stock with the appraiser and furnish information as to obsolete patterns, as well as those that are gradually becoming obsolete. It often happens that a company's sales contracts require them to furnish duplicate parts on demand. This necessitates the preservation of patterns for machines superseded by those of more recent design, in order to fill occasional orders. Obviously, the only way the appraiser can know of these cases is by the personal assistance of a representative of the company. A satisfactory compromise may be effected by going over the pattern books with the superintendent and obtaining the original cost and date of manufacture, together with information as to obsolete and obsolescent patterns. The appraisal of drawings can be based on the assumption that each drawing is a necessary accessory of the pattern built from it. The value of the drawings then bears a definite ratio to the value of the corresponding patterns, with the exception of drawings relating to obsolete patterns. While from time to time it may be necessary to destroy obsolete patterns in order to avoid congestion in the pattern store-room, it is rarely advisable to destroy the corresponding drawing. DRAWING, TRACING AND BLUEPRINT PAPER Drawing Paper. - Drawing papers are made in sheets and in rolls. One wellknown quality of drawing paper, made in sheets, is known as "Whatman." This paper is made with three different kinds of surface: Smooth or "hot-pressed" (marked HP); finely grained, "not hot-pressed" (marked N); and rough or "coldpressed" (marked R). The first of these classes is generally used for pencil and very fine line drawings; the medium grade is used for general purposes; and the coarsely grained paper is used for drawings with very heavy lines, sketching, etc. Drawing papers in rolls are made in widths of 30, 36, 42, 56, 62 and 72 inches, and are generally sold in rolls containing from 35 to 40 pounds each. They are also sold in rolls containing 10 yards each. The length of the paper in a roll of standard weight depends upon the thickness of the paper, and it is therefore not possible to state the length of paper contained in a roll, as this varies from about 75 yards to the roll for the thinnest papers and the smallest width, to about 20 yards to the roll for heavy and very wide papers. These sizes are only approximate, as manufactured drawing papers will vary as much as one inch, in some cases, from the dimensions given. Tracing cloth is made in rolls of 24 yards each and in widths of 30, 36, 38, 42, 48 and 54 inches. One side is very smooth and glossy while the opposite side has a dull finish. Drawings may be made on either side. It is easier to erase inked-in lines on the glossy side, but it does not take the ink as well, and the surface must be prepared before inking by rubbing powdered chalk or talcum powder into it with a cloth or chamois skin. It is easier to ink-in a drawing on the dull side, but it is more difficult to make changes. Sizes of Drawings. Tracing paper is generally made in rolls 30, 36, 39 or 42 inches wide, containing 20 yards each. Some of the best classes of tracing papers are very tough, transparent and strong and may for many purposes be substituted for tracing cloth. For ordinary shop drawings it has come to be regarded as good practice to adopt standard sizes for the sheets or drawings, making the largest standard sheet about 24 X 36 inches and subdividing this into half sheets, 18 x 24 inches, quarter sheets, 12 X 18 inches, and eighth sheets, 9 X 12 inches. If a sheet larger than 24 X 36 inches is needed, a double-sheet 36 X 48 inches is used. This is generally the largest sheet that need be used for ordinary machine drawings. Miscellaneous Kinds of Drawing Papers.- Standard profile paper is obtainable in green and orange ruling, and either in sheets or in rolls. The sizes of the sheets are 15 X 42 inches and the rolls contain 50 yards, 10 or 20 inches wide. Crosssection paper is obtainable with a ruling of either 10 or 16 lines to the inch, and also with millimeter ruling. The ten-to-the-inch kind is made in sheets 16 X 20 inches, or in rolls 20 inches wide containing 50 yards. The sixteen-to-the-inch kind is obtainable in sheets 17 X 22 inches, or in rolls 20 inches wide containing 50 yards. The kind ruled in millimeters is obtainable in sheets 16 X 20 inches or in rolls 20 inches wide containing 50 yards. There is also cross-section paper made with 8 and 12 lines to the inch, in approximately the same sizes as other rulings. Logarithmic cross-section paper is made in sizes 10 X 10 inches. Isometric cross-section paper is obtainable in sizes 6 × 9, 9 X 12 and 12 X 18 inches. Blueprint paper is generally sold in rolls of 10 yards or 50 yards each, the width of the paper being 24, 30, 36, 42 and 54 inches. Blueprint cloth, which on account of its strength is preferred for blueprints intended for rough handling, especially for construction drawings for outdoor work, is made in rolls of 10 and 50 yards each, and in widths 30, 36 and 42 inches. Blackprint paper, also known as "nigrosine" paper, for printing black lines on a white background, is made in rolls of 10 yards each and in widths of 30, 36 and 42 inches. Papers are also obtainable for printing negative prints with white lines on black background, and positive prints with black lines on white background. Unsensitized papers for blueprinting are obtainable in rolls of 50 yards, and in widths of 24, 30, 36, 42 and 54 inches, Preparing Blueprint Paper. — Blueprint paper may be prepared as follows: Dissolve one ounce of ammonia citrate of iron in six ounces of water, and in a separate bottle dissolve the same quantity of potassium ferro-cyanide in six ounces of water. Keep the two solutions separate and in a dark place, or in opaque bottles. To prepare the paper, mix equal quantities of the two solutions and with a sponge spread it evenly over the surface. Let the paper remain in a horizontal position until the chemicals have set on the surface. This will take only a few minutes, after which the paper is hung up to dry. It is necessary to darken the room by pulling down the shades when the paper is prepared, as direct daylight would affect the sensitized surface. The prepared or sensitized paper must be kept in a closed drawer well covered with heavy paper, so that it will not come in direct contact with the light. Blueprint paper, however, is seldom sensitized at the present time by the users, because the manufactured blueprint paper can be obtained at a price which hardly warrants the trouble of sensitizing small quantities. Making a Blueprint. When making a blueprint from a tracing, the latter is laid with the ink side down against the glass of the printing frame and then the blueprint paper is laid upon the tracing with the sensitized surface towards the back of the tracing. On top of the paper is laid a felt cushion pressed against the blueprint paper, tracing and glass of the printing frame by means of springs in the hinged back of the frame. The tracing with the blueprint paper beneath it is then exposed to the sunlight. The exposure will vary from about 3 to 10 minutes, according to the intensity of the light. After the exposure, the paper is washed thoroughly in cold water for about ten minutes and then hung up to dry. The print should show a deep blue color after washing and the lines should be clear white. If the color is pale blue, the print has not been exposed to the light for a sufficient length of time. If the lines of the drawing are not clear and white, the print has been over-exposed. An over-exposed blueprint can be improved upon by pouring a teaspoonful of bi-chromate of potash dissolved in one-half gallon of water over the print while it is in the sink. The print must then be again washed with water before it is hung up to dry. The bi-chromate of potash solution will improve the appearance even of blueprints that have not been over-exposed. Drawings and blueprints may be varnished before sending them out into the shop in the following manner: Dissolve gelatin in water and coat the drawing with this by means of a soft brush. After this coating has thoroughly dried, give the drawing a coat of common clear varnish. PATENTS Patentable Inventions. - Patents are issued by the United States Patent Office to any person who has invented or discovered any new and useful art, machine, method of manufacture, composition of matter, or any new and useful improvement along these lines. In order to obtain a patent for an invention, the latter must not have been known or used by others in this country previous to the time the invention was made by the person applying for the patent; nor must it have been described in any printed publication in this or any foreign country before the invention was made by the person applying for a patent in this country, or more than two years prior to the application for a patent. A patent cannot be granted if the article has been in public use or for sale in the United States for more than two years prior to the application for a patent. A patent contains a grant to the patentee, his heirs or assigns, for a term of seventeen years, for the exclusive right to make, use or sell the invention or discovery throughout the United States. In case the inventor at the time of making his application believed himself to be the first inventor or discoverer, but it is subsequently found that the invention or discovery has been known or used in a foreign country before the time of his invention, he will not be refused a patent providing the article has not previously been patented or described in any printed publication. The application for a patent in this country must be filed within 12 months after an application for a patent may have been filed in a foreign country; otherwise, no patent will be granted in this country. In the case of ornamental or other designs, the foreign application must not be filed more than four months prior to the time when the application is made in this country. Joint Inventions.- Joint inventors are entitled to a joint patent, but neither can claim one separately. Independent inventors of distinct and independent improvements in the same machine cannot obtain a joint patent for their separate inventions. If one person furnishes the capital and another makes the invention, they cannot make application as joint inventors. The inventor only can make such application; but they may become joint patentees by means of a deed of assignment. Applications for Patents. An inventor who wishes to apply for a patent, and is not familiar with the rules of patent practice, should apply to the Patent Office, Washington, D. C., for a copy of the "Rules of Practice," which will be sent upon request. It is also advisable that the services of a competent and duly registered patent attorney be secured, as the values of patents depend largely upon the preparation of the specifications and the claims. An inexperienced person will often prepare claims which cover only the particular design for the apparatus in which the invention at first may have been executed. The invention, however, may be much more fundamental in character, and the claims should cover all possible designs by means of which the same end may be obtained with the same fundamental principles of action of the device. The patent office, while it will not recommend any particular patent attorney or firm, advises applicants to avoid doing business with those attorneys who advertise the possession of unusual facilities for obtaining patents. Applications for a patent must be made in writing to the Commissioner of Patents. The applicant must also file in the patent office a written description of the invention or discovery, in clear, concise and exact terms. In the case of a machine, it is necessary to particularly point out and distinctly claim the particular improvement or combination of which the inventor claims to be the discoverer. The specification and claim must be signed by the inventor and two witnesses. When |