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Spending more money on infrastructure means profits will increase. There's not really any way around that. Capital expenditures are profit.
by Aloisius 1y ago
Spending more money on infrastructure means profits will increase.
There's not really any way around that. Capital expenditures are profit.
- cryptonector 1y agoWell, no, capital expenditures can create future profit. Emphasis on _can_ and _future_.
- Aloisius 1y agoNo. Capital expenditures are profit (or really, count towards earnings). They're long-term investments in fixed assets, not expenses that get subtracted out when calculating net income. You're just swapping cash with assets of equivalent value, so profits don't change. I'm not sure how PG&E would possibly not increase their profits if they got a rate increase meant to cover infrastructure investments. If they spend 100% of that increased revenue on infrastructure, then 100% of that counts towards profit - not in the future - immediately.