CAPITAL REPLACEMENT Definition

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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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SURVEILLANCE is close watch kept over someone or something.

THIN MARKET is a market in which there is not an abun­dance of securities available, where any activity, either a purchase or sale, may have a substantial effect on market prices. See TIGHT MARKET.

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