Salvage value Terminal cash flows, Finance, Other Engineering

Terminal cash flows

Salvage value

Salvage value (SV) is the most common example of terminal cash flows. Salvage value may be defined as the market price of an investment at the time of its sale. The cash proceeds net of taxes from the sale of the assets will be treated as cash inflows in the terminal (last) year. As per the existing tax laws in India, no immediate tax liability (or tax savings) will arise on the sale of an asset because the value of the asset sold is adjusted in the depreciable bases of assets.

The effects of the salvage values of existing and new assets may be summarized as follows:

• Salvage value of the new asset it will increase cash inflows in the terminal (last) period of the new investment.

• Salvage value of the existing asset now it will reduce the initial cash outlay of the new asset.

• Salvage value of the existing asset at the end of its normal life it will reduce the cash flow of the new investment of in the period in which the existing asset is sold.
Posted Date: 1/31/2012 11:58:26 PM | Location : United States







Related Discussions:- Salvage value Terminal cash flows, Finance, Assignment Help, Ask Question on Salvage value Terminal cash flows, Finance, Get Answer, Expert's Help, Salvage value Terminal cash flows, Finance Discussions

Write discussion on Salvage value Terminal cash flows, Finance
Your posts are moderated
Related Questions
The unity gain follower: The somewhat lengthy term operational amplifier will now be dropped and it will be referred to, as most people do, simply as the op amp.  The simplest

BASIC ENGINE DESIGN CONSIDERATIONS Effect of engine size: The two parameters involved are the diameter, d and stroke, L of the engine. The effect of doubling each of this

VARIATION OF ENERGY BAND GAP WITH ALLOY COMPOSITION

The atmosphere in the room was tense. Ted Kimoski, Financial Director for Global Mining, had justfinished his presentation. John Campbell, Managing Director, sat quietly making not

Explain derivatives in terms of capital markets The term mixture indicates that it has no separate value that is its value is entirely resulting from the of the actual resources

Fire suppression Typical fixed systems in the types of aircraft for which fixed fire extinguisher systems are specified, it is usual for the extinguishant to be stored in the c

explain the fibre optic communication system with block diagram

obtain the polyphase structure H(Z)=1-3Z^-1/1+4Z^-1


Fire alarm systems: All buildings require a means by which the warning  of  fire  can  be  given  to  all occupants.  In the very smallest premises this might be achievable by