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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BUFFER STOCK see STOCK RESERVE.

RPI, among many others, can be Retail Price Index, Real Property Inventory, Rapid Process Improvement, or Responsive Production Inventory.

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