Do you take into account the depreciation of an asset when you do the math? Depreciation is a finance term that means a replacement of value that the owner should make over time, so that when the product reaches the end of its useful life, there is enough capital to replace the product.
There's that famous saying about a man entering the river, "No man ever steps in the same river twice," which aptly symbolizes the passage of time and the constant change that everything undergoes. In the case of goods, tools, and machines, they suffer constant degradation due to humidity, oxidation of parts, and the lifespan of the materials. It's curious that people don't take this into account when they buy a product. Have you ever heard anyone talking about the depreciation cost of the last phone they bought?
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Depreciation in Companies vs. Products
The issue of asset depreciation is a term that frequently appears when preparing a company's balance sheet, evaluating assets and liabilities. Assets like machinery, cars, and tools used by a company usually have a useful lifespan, and the value of the asset is divided by this time, with this value being considered annually as a depreciation expense. After all, it's common to expect that when the end of a piece of equipment's useful life arrives, the company will likely have to replace it, not to mention the periodic maintenance required.
The curious thing is that the same thing happens on a smaller scale with individuals. When they buy a phone, a computer, a washing machine, a refrigerator—these are products that, while some may last many years, in the case of phones, tend to have a relatively short lifespan because companies stop performing updates, and parts begin to malfunction. But then why isn't it considered in personal accounting that everyday equipment is depreciating and generating a loss of value?
The reason might scare people, because it implies considering that the more devices and machines they have, the more they depreciate each passing year. In the case of digital products, they end up becoming outdated, no longer receiving program updates because the requirements are constantly increasing, apps are getting larger, demanding more resources.
The parts begin to oxidize, and time causes each of these products, which were perfect the day they "came out of the river," to become "old" equipment when they return to it years later, considered obsolete by future generations. This happened with discs, DVDs, USBs, and it continues, a technological depreciation.
Depreciation vs. Cost-Benefit
The phrase cost-benefit starts to make more sense when we think about depreciation. A product that is more expensive but has a longer lifespan and higher quality may end up compensating for the higher cost, since it will last longer and be more useful during that time. Another point to consider is when someone buys something very expensive, doesn't use it much, and that durable good ends up being a waste.
