Question

Estimated sale value of the asset at the end of its economic life is known as _______ .

• A. Purchase Value
• B. Market Value
• C. Written Down Value
• D. Residual Value

Answer 1

Answer: (D)

Residual Value

Because, The residual value is the estimated value of a fixed asset at the end of its lease or at the end of its useful life. The lessor uses residual value as one of its primary methods for determining how much the lessee pays in lease payments. As a general rule, the longer the useful life or lease period of an asset, the lower its residual value.