While the question of holding or disposing of any given piece of property is usually decided by the executive rather than by the accounting department, the decision often depends on information furnished by the latter. This information relates largely to the cost of the property - present or future. This cost may include one or more of five distinct classes of expenditure, viz.: cost of (1) acquirement, (2) holding, (3) maintenance, (4) operating, (5) investment.

1. The cost of acquirement has been discussed in the preceding chapter. It represents the actual amount spent or guaranteed in acquiring the property, and also includes the cost of physical improvements added thereto.

2. The cost of holding includes those expenses, such as interest and taxes, which are necessary to retain the property (not to maintain it), which do not increase its intrinsic value, and which are often classed under the head of "Fixed Charges."

3. The cost of maintenance applies to improved property only, and consists chiefly of such items as repairs and renewals.

4. The cost of operating applies only to a limited number of cases, such as office buildings and apartment houses, and includes lighting, elevator service, and other similar expenditures necessary to obtain the normal returns.

5. The cost of investment, as here used, does not cover the full cost of acquiring, but only the actual cash outlay involved! Strictly speaking, this amount is not a cost, al-though it is sometimes convenient to regard it in that light when calculating profits derived or to be expected.