On the Convergence of Periodic Reinvestments by an Amount Equal to Depreciation

This paper analyzes the pattern of periodic reinvestments in depreciable assets when the amount of reinvestment in each period is set equal to the amount of depreciation for the period and derives a constant to which the periodic investments converge. The expression for the constant which depends upon the depreciation method is then interpreted in terms of the firm's investment and financing policy as well as its growth rate.