Depreciation is tangible.

So I'll just write down the number first.

So therefore, I put it down there.

They're usable over two years.

And there's all sorts of intangible assets that you might amortize.

This is the interest rate you assume.

They have no money down, 1 million loan, subprime, negative amortization, they had no credit rating, etc, etc.

And I'm running out of time in this video, and I'll cover it in the next, but you might have also heard of the word

And then their SG amp A is the same.

This is all a review of the depreciation video.

Our profit, once again, is 30,000.

And amortizing really just means spreading out the cost of this asset, just like depreciation was spreading out the cost of a physical asset.

Really, in my mind, it's very similar to depreciation.

Nothing fancy.

So no cash went out of the door.

That's just the gasoline cost.

And just so you know, most corporate debt actually works that way.

I'd like to replace it.

Allow me to replace it.

Well, you know depreciation, man.

If you divide 50,000 by 4, it's 12,500.

You can't create this with standard manufacturing techniques even if you tried to do it manually.

So 20,000 over 3 years is the life of that truck.

Accounts Receivable, that they're not changing over the course of the year.

And then instead of having an equipment expense, instead of having that expense, they'll have an equipment depreciation expense.

To figure out the cash from operations from actually how much cash the operations are producing.

So for example, depreciation, this was factory equipment, and it gets old as I use it, so I spread out its cost.

The Drone will escape.

And then at the end of 2010, it'll say the machine is worth nothing.

Make him pay.

No, we didn't.

You'll often hear the words depreciation and amortization used together.

Our short term goal for this is to be half the price of solar cells and our longer term goal is to be less than a five year payback.

So I used half of it in year one.

I'm betting the judge will dismiss the whole case.

And then the other 250,000 essentially went to an expense called depreciation, which is right there.

Let her replace it.

Have the textbook room charge him for it.

I will make it my personal mission to see that you pay the ultimate price for your crimes.

Oh, my God. I'm so sorry. We'll pay for the damage.

Because I think the newspapers do that, but a lot of people don't understand the basic accounting.

That bottle winds up getting burned.

At this point in time, your patent is arguably only worth 1,000, because you paid 4,000 for four years, and now you only have a year left.

amortization. Amortization is to spread out a non tangible cost over a period of time.

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