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Net salvage value E
Financial Management
Here, book value after 2 years (6-2) 4lakhs Sale value (assumed mv =sale value) 3lakhs Tax saving 30k Total net salvage value= 3.3lakhs Then, why we are not mentioned in this problem they just said that residual value is zero means terminal cash inflow zero not about book value .. Can you please explain it sir Video Details ------------- Financial Management Investment Decisions #125. Illustration 49 - Q4 Jul 21*
Answers (4)
date of purchase is 2 years ago. Value of purchase is 6 lacs with 6 years life and 0 salvage value at end If we follow WDV method, depreciation is not 1 lac per year but 20% on opening WDV Same way tax saving computation is also incorrect. Pls go through full video and notes also and let us know further queries
Sriram Somayajula Admin
date of purchase is 2 years ago. Value of purchase is 6 lacs with 6 years life and 0 salvage value at end If we follow WDV method, depreciation is not 1 lac per year but 20% on opening WDV Same way tax saving computation is also incorrect. Pls go through full video and notes also and let us know further queries
Yes sir, wdv 20% sorry for that mistake but mainly my doubt is They given residual value at end of year 7 zero Not book value ?
Thread Starter
anju BYes sir, wdv 20% sorry for that mistake but mainly my doubt is They given residual value at end of year 7 zero Not book value ?
Residual value is sale price at end that has no relation to book value In Block of assets method, until block value becomes zero or no assets are left in the block, dep is charged - pls go through the concept in income tax If that is the case book value of this one asset alone is irrelevant. It is part of the overall block
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