Question

Salvage value means ____________.

• A. Discounted estimated scrap value
• B. Current selling price
• C. Historical cost less depreciation
• D. Estimated disposal value

Answer 1

Answer: (D)

Estimated disposal value

There are three main factors which determines the basis of depreciation. These are:

1) Cost of Assets

2) Scrap Value of Asset

3) Estimated working life of asset

Depreciation is calculated by considering the above three factors.

Depreciation= Cost of Asset - Scrap/disposal value

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Estimated life of assets

Salvage value/scrap value means the estimated disposal value.