And then their SG amp A is the same.

So therefore, I put it down there.

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

So I'll just write down the number first.

Depreciation is tangible.

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

The desert was advancing by a mile or two a year.

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

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

So no cash went out of the door.

That's just the gasoline cost.

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

So I used half of it in year one.

Our profit, once again, is 30,000.

They're usable over two years.

There are already 5.5 billion mobiles in the world.

leaving lower quality coal that is less energy dense.

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

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

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

So let's project this analogy going forward.

This is the interest rate you assume.

They are the backbone of our life.

And so that is my story.

Nothing fancy.

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

This is all a review of the depreciation video.

Well, you know depreciation, man.

And then we have depreciation, and we want to think a little bit in this video, what does the depreciation do to the cash flow statement?

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

No, we didn't.

You will be reimbursed.

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

Our starting cash was 50,000, we had 50,000 from operations, now our ending cash is 100,000.

Western corporates will put their hands on juicy contracts that will once again deprive re colonized countries of their wealth and raw materials.

Well, that one time lump sum fee should probably be spread over the life of the debt, so you would amortize that expense over its life.

And this is just an arguably long winded way of saying that the way you account for this is you spread out the cost over time, over its useful life, and this spreading out is called the depreciation of an asset.

Sometimes it can even completely obstruct the blood vessel.

The issues of energy shortages, resource depletion, topsoil loss, and pollution are all symptoms of a single, larger problem

I can't just put that in my pocket.

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.

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

The withering of all woods is drawing near.

It just makes economic sense. Right now, solar paybacks are between 30 and 50 years.

Atonement.