Cozy Corner

Since today seems to be "answer questions day", I thought I'd address AbbaGav's:

Consider the overhead costs of maintaining these ten thousand missiles year after year. This would just be a nightmare for Hizballah's accountants, who I'm sure are praying, to a man, that Nasrallah fires off every last one of these suckers right away. Consider just the inventory taxes -- do you have any idea what the depreciation schedule is for second-hand missiles?

I thought I'd take a look into this. Now, granted, Hizb'allah isn't a publicly traded stock (rumor has it they are in negotiation to acquire Herlitz AG to get the coveted "HEZ" listing), but we'll use GAAP rules anyway, as the Generally Accepted Accounting Principles seems like a good start.

Under GAAP, calculating depreciation requires four things: the cost, estimated life, residual value, and the method of depreciation.

The cost is the hardest thing to calculate. Hizb'allah has sold itself to Iran and Syria to get the missiles; so effectively, they represent a round of VC funding for Hizb'allah. Like most VC rounds, this probably wipes out any previous shareholder value. Let us assume that Hizb'allah has 10,000 potential shahids (like most good companies, they can inflate their numbers). Since each shahid's life is valued at the requisite 72 virgins, the capital value of Hizb'allah is thus worth 720,000 virgins. Therefore, each of the 10,000 missiles must have a value equivalent to 72 virgins.

Next, is the estimated life. Now, this one's pretty hard. I wonder if Hizb'allah's annual report's risks section says something like "Zionist Aggressor. Any day, those darned Israelis may decide to stop putting up with our shit, and come over and kick our asses, and destroy our missiles. If so, this may drastically reduce our long-term ability to induce more shahids to join our cause, and grow our potential virgin pool." Of course, this assumes we're treating the missiles like a capital expense, instead of like an operating expense, which they more closely resemble. Functionally, each missile has two lifespans: deterrent/threat as capital, and to shoot at Israelis as an operating expense. But we can actually set the estimated life to be 37 years, and then use a trick to depreciate it.

Normally, depreciation is done as a straight line, or even some front-loaded models. We, however, want to rear-load the depreciation, so we are going to select the units of production method. Under this method, instead of depreciating simply based on time, we depreciate based on units produced - that is, missiles fired. Here, we'll employ a one-to-one ratio; each missile fired fully depreciates the remaining value of the missile. Since we can assume a bathtub curve of missile failures, we'll additionally depreciate 10% of the value in the first year, 1% in each of the next 30 years, and 10% in the subsequent 6 years; this ties to the 37 year depreciation span. If we postulate that the delivery of missiles had been evenly spread over the previous 6 years, prior to this conflict, Hizb'allah accountants had to depreciate 108,000 virgins (rumors that Allah heaved a sigh of relief are believed to be infidel lies).

Now, for residuals. What is a rocket worth after it fires? According to Aussie Dave, channelling Arutz Sheva, the launching of 2268 missiles has resulted in 28 fatalities, and 642 injuries. Hizb'allah bookkeepers take a notoriously dim view of survivors, as the Zionist have been known to rehabilitate them, and even allow them to breed (damn that Jewish uterus!). Hizb'allah accountants do, however, note the fatality rate of .01234568 casualties for each missile (even though some casualties can be retroactively declared shahid, this is not currently within the long-range business plan, and thus, is simply upside). But what is a dead Jew worth to a Hizb'allah accountant? Well, according to Wikipedia, 26.3% of Israelis are under the age of 15, only 48% of whom are female (male virgins, despite rumors to the contrary, are not useful in the heavenly bartering system, and females are preferred to be under the age of 15). Statistically, therefore, each rocket is expected to send .00158514 useful virgins to the afterlife., this is the residual.

Hence, each rocket fired has a average depreciation on use of 61.1984149 virgins. Compared to the normal annualized depreciation of 7200 virgins, each batch of 117.65 rockets effectively burns one additional year of depreciated value.