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Abandonment Value

by economypedia
written by economypedia

The cash or cash-equivalent that yields of liquidating a project or selling an investment. The Abandonment value process is important consideration for the investors and companies during the project to evaluate the profitability of project and decided whether is the project not profitable but has also incurred costs. The rule which used to make this decision caled net present value (NPV). A project is useful if the present value of all future net cash flows is greater than its abandonment value; otherwise the project is retired or sold prior to the end of its useful life.

 

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AFinance

abandonment

by economypedia
written by economypedia

The action of relinquishing all title,rights of claims to an asset or property completely and intentionally by the legally owner to a next owner.

The abonnement could be with the tangible assets for example:

  1. Real estate.
  2. Machinery.
  3. Stock.
  4. Bonds.

And for the intangible assets such as:

  1. Patents.
  2. Trademarks.
  3. Franchises.
  4. Goodwill.
  5. Copyrights.

Elements of Abandonment

1. Act- abandonment must be done actually, through physical manifestations and not merely verbal or mental.

2. Intention- the intention to abandon must be present. It must be voluntary and not forced.

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