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Plz plz plz help in f.m.

Siddharth Singh (CA-Final) (202 Points)

02 September 2012

I m gettng confused a lot in budgeting qustions plz tell me what is the meaning of TERMINAL VALUE and SCRAP VALUE and SALVAGE VALUE in context to capital budgeting??

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2 Replies

Neha sharma (-) (1257 Points)
Replied 02 September 2012

Hi Siddharth

At the end of the Life of the Machine, the Machine is sold in the Market. The amount fetched by selling that machine in the market is called Salvage Value/Scrap Value/ Terminal Value

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Siddharth Singh (CA-Final) (202 Points)
Replied 04 September 2012

Thank you neha, but in capital budgeting questions, treatment for scrap value is different and treatment for terminal value is different. can you please further elaborate your answer?