CAPITAL CHARGE Definition

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CAPITAL CHARGE is a monetary amount, calculated by multiplying the money the business has tied up in capital, by the weighted average cost of capital (WACC). Capital charge is deducted from net operating profit after tax to arrive at Economic Profit.

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SSARS see Statements on Standards for Accounting and Review Services.

PROFITABILITY RATIOS are measures of performance showing how much the firm is earning compared to its sales, assets or equity.

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