Economic consistency of salvage value definitions

Pierre Haessig (1)

1 IETR - Institut d'Électronique et des Technologies du numéRique

This short report analyzes the definition of the salvage value of a component within an wider project investment analysis. The analysis shows that the classical definition is close but not exactly consistent from an economic point of view. For an exact economic consistency of the salvage value, we derive an alternate definition using a more complex formula. This formula is equivalent to the classical definition when the discount factor is zero up to second order factors.

Domaines: Energie électrique; Economies et finances

Pierre Haessig. Economic consistency of salvage value definitions. 2023. ⟨hal-04097092⟩