Quote:
Originally Posted by Tools
Your analysis isn't your cost of ownership. It is simply the purchase price divided by an arbitrary number of years.. hardly an "anlysis" and fails in several areas..
First, you are assuming that it is in the "family" for that long..... all well and good, but that isn't your term of ownership. If you croak next year, then your "cost of ownership per year" was $7600 for the single year that you had it. For whom ever else gets the watch, their cost is zero for the next 74 years (plus any maintenance costs)
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Yes, this does analyze your cost of ownership and when I was talking about the term of ownership, I SPECIFICALLY said in MY analysis it included passing it on. I just broke it down in your cost per year to show that if you keep the watch over the long term, you cost becomes much more palatable. Also, if you resell it you have the potential of recouping some or all of your costs back. If one does the analysis for themselves, THEIR parameters will be different thus getting a different result.
And yes, I did "assume" that it would stay in the family that long. If it doesn't, then the analysis is off. In any financial model, you make "assumptions" that are subject to change as facts and circumstances change. Thats why there are limitations in any projections. Again, the point of the thread, is to get people to think.
What do I know though, I'm just a CFO of company who does this for a living. I have no clue.