Glossary
Salvage value
Salvage value is the amount you expect to sell an asset for at the end of its life after you have used it up.
What it means for a shop owner
You subtract it from the cost of the asset to find the amount you will really use up. It may be zero for an asset that cannot be resold. Estimate it modestly.
A worked example
A machine costs 5000 and you expect to sell it for 500 after 5 years. 4500 is used up, which is 900 a year.
Related
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