The plans have a bearing on the future direction of the company. Long range plans must inherently be flexible because economic conditions may change dramatically. On the other hand, plans at lower levels in the firm tend to be very detailed and specific in nature. They are typically very short-run in nature, involving immediate action. These plans may be unwritten and tend toward simplicity.
Depreciation represents the cost to the business of assets wearing out.
Depreciation is a tax deductible expense and is included on the income statement of the fir as an operating expense. It also shows up on the balance sheet by reducing the value of fixed assets. Advantages- lower taxes, member financing, limited liability, free from antitrust regulations. Disadvantages- limited returns, difficult to sell stock. In a perfectly competitive market environment, producers are free to enter and exit the market at will.