Abstract The practical conclusions to be arrived at from the foregoing analysis can be briefly summarized as follows. A method is given of calculating the most economically advantageous period of use for a machine installation, and in particular of ascertaining on correct theoretical lines when a given machine will be due for replacement, the latter by stating the correct depreciation value on which to base a comparison of the increased capital costs from a new machine with the simultaneous saving in maintenance and running costs. It is also shown how depreciation should be theoretically allocated to the different years of the service period; and the close approximation in replacing the theoretically correct procedure by calculating the constant annual depreciation in such a way that depreciation is complete after % of the estimated optimum service period.