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Definition of 'Mothballing'

Mothballing is the process of storing an asset, such as a ship or an aircraft, in a state of preservation so that it can be used again at a later date. The term is derived from the practice of storing moths in a box to prevent them from damaging clothing.

Mothballing is often used when an asset is no longer needed for its original purpose, but it is still too valuable to be scrapped. For example, a ship may be mothballed if it is no longer needed for commercial shipping, but it could be used again in the future if the need arises.

Mothballing can be a cost-effective way to preserve an asset. The cost of mothballing is typically much lower than the cost of building a new asset or refurbishing an existing asset. However, mothballing does have some disadvantages. For example, the asset may deteriorate over time if it is not properly maintained.

There are a number of factors to consider when deciding whether to mothball an asset. These factors include the cost of mothballing, the potential value of the asset in the future, and the likelihood that the asset will be needed again.

If you are considering mothballing an asset, it is important to consult with a financial advisor to get professional advice.

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