Supply Chain Glossary - C

Supply Chain Glossary - C

capital rationing

In financial management, the process of apportioning capital expenditures among prospective projects to conserve limited investment funds.

1) Charging periodically to operations amounts that will ultimately equal the amount of capital expenditure. See: amortization, depletion, depreciation. 2) The replacement of the original cost of an asset plus interest. 3) The process of regaining the net investment in a project by means of revenue in excess of the cost from the project. (Usually implies amortization of principal plus interest on the diminishing unrecovered balance.)


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