Residual value (See Chapters 18 and 19 of the Vernimmen) Evaluation of any investment project entails forecasting not only all cash flows over a given period with an explicit forecast period, but also the residual value beyond that horizon. Residual value is the expected value of the assets at the end of their life, in current values. Although the discounted (see discounting) residual value is frequently very low since it is very far off in time, it should not be neglected. Its book value is generally zero, but its economic value may be quite significant since accounting depreciation may differ from economic depreciation. The residual value reflects the flows extending beyond the explicit investment horizon, and on into infinity. Residual value is also called salvage value. Residual value (See Chapters 18 and 19 of the Vernimmen) Evaluation of any investment project entails forecasting not only all cash flows over a given period with an explicit forecast period, but also the residual value beyond that horizon. Residual value is the expected value of the assets at the end of their life, in current values. Although the discounted (see discounting) residual value is frequently very low since it is very far off in time, it should not be neglected. Its book value is generally zero, but its economic value may be quite significant since accounting depreciation may differ from economic depreciation. The residual value reflects the flows extending beyond the explicit investment horizon, and on into infinity. Residual value is also called salvage value. See all terms in the dictionary of finance To know more about it, look at what we have already written on this subject :

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Definitions of terms begining with the same letter as "Residual value" :

R&D RCF RNAV ROCE ROE Range note Ratchet effect Rate of discount Rate of return Rate tunnel Rating Rating agency Rating outlook Raw material prices risk Re-rating Real dilution Real interest rate Real options Realised rate Recapitalisation Receivables Recommended offer Recoverable value Recurrent items Recurring items Redemption

Reference rate Registered bond Regulatory changes Regulatory risk Relative value ratio Rendez-vous clause Repayment by equal instalments Repayment by tranches (or series) Repayment in fine Replacement cost Replicating portfolio Repo, repurchase agreement Representations and warranties, Reps & warranties Reps & warranties Repurchase agreement Required rate of return Requirements in working capital Research and development costs, R&D Reserved capital increase Residual pool Residual value Resistance level Restated net asset value, RNAV Restrictive covenant Restructuring charges Restructuring provisions

Retail investor Retail public offering Retained Cash Flow Retained earnings Return Return on capital employed, ROCE Return on equity, ROE Return on investment Revenues Reverse flex Reverse repo Revolving credit Right of approval Right of first refusal Rights issue Risk Risk of a fraud Risk of default Risk of illiquidity Risk premium Risk-free assets Risk-free rate Risk/return ratio Roadshow Rule 144A