ABSTRACT
Investment used for oil drilling machinery, well casings, etc.-that is, fixed capital-cannot be converted directly to original capital invested in oil equipment and machinery, because these physical properties decrease in value as time progresses. They decrease in value because they depreciate, wear out or become obsolete. Recovery of this investment of fixed capital, with interest for the risks involved in making the investment, must be assured to the investor. The concept of capital recovery thus becomes very important.
