SUSTAINING CAPITAL REINVESTMENT Definition

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SUSTAINING CAPITAL REINVESTMENT is the periodic capital outlay required to maintain operations at existing levels, net of the tax shield available from such outlays.

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SHAREHOLDER LOANS include any loans between a corporation and any of its shareholders. Loans from shareholders are normally carried as long-term debt, but the reality is such loans should be counted as equity (they are not) because they rarely are paid back to the shareholder.

ENCUMBERED is when an asset is owned by one party subject to the legal claims of another party. One example is a homeowner that owns a home that is subject to (encumbered by) the claims of the mortgage holder.

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