A fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.
- In each period a certain percentage of gross output is set aside into a sinking fund for depreciation and replacement; this percentage is based on the length of life of machines, which is assumed to be given and constant.
- The banks which finance the investors may well require that the promoters/operators put aside a fixed amount into a sinking fund over the period of ownership by the investors.
- He also proposed a sinking fund, financed by post office revenues, that would be pledged to pay off the debt.
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