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CAPITAL REPLACEMENT, or economic depreciation, is the portion of the value of machinery and equipment, in addition to repairs, that is used up in the production of a particular commodity. It is based on the current value of the machinery. Capital replacement may be regarded as a discretionary expense in any particular year. It may be deferred when income is low but ultimately must be paid to maintain the capital stock so that over the long term, the operation remains in business.

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FUND THEORY views the organization as a series of funds or sub-funds represented by various services or departments.

BANK BASE RATE is the annual interest rate on which British banks calculate lending charges (minimum lending rate).

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