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What does amortization mean?

Looking for the meaning or definition of the word amortization? Here's what it means.

Noun
  1. The reduction of loan principal over a series of payments.
  2. The distribution of the cost of an intangible asset, such as an intellectual property right, over the projected useful life of the asset.
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Examples
A prolonged amortization phase results in a less than optimum neuromuscular efficiency from loss of elastic potential energy.
The decrease in other operating expenses is due to the drop in amortization and professional fees.
Since impairment depends on market values, it will be much less predictable than straight-line amortization based on acquisition price.
Mr Edmonds estimates that three or four times earnings before interest, taxes, depreciation and amortization, or EBITDA, is typical.
The simplest method of allowing for the costs of capital services is to calculate the annual amortization of the building over its expected life.
Its stock, trading at just two to three times earnings before, interest, taxes, depreciation, and amortization, was low, even for the down-trodden auto-parts industry.

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