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A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt. In North America and elsewhere where it is common for government entities and private corporations to raise funds through the issue of bonds , the term is normally used in ...
A sinking fund is money you save for a particular goal. That goal might be a future purchase, such as a car, or a predictable expense you pay on an infrequent schedule, such as self-employment tax.
With a sinking fund, you set yourself up with cash reserves so you’re not forced to rack up debt for a one-off purchase like a big trip. A sinking fund is a simple, effective tool to save for ...
Designated fund – assets which have been assigned to a specific purpose by the organisation's governing board but are still unrestricted as the board can cancel the desired use. [9] Trading funds – Many large non-profit organisations now have shops and other outlets where they raise funds from selling goods and services. The profits from ...
In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1] [2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3]
The most expensive time of year has arrived. Spending on holiday gifts, decorations, parties, dinners and travel can add up fast, so having a 'sinking fund' -- i.e., money allocated to extra ...
F = Sinking fund amortization factor I = Investment S = Estimated salvage value = Operating expense stream d = CCA rate per year for tax purposes t = rate of taxation n = number of years i = cost of capital, rate of interest, or minimum rate of return (whichever is most relevant) and where
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