Residual value represents the net value of an asset at the end of its useful life. Calculated by subtracting disposal costs from salvage value. Salvage value is the book value remaining on the balance sheet. Disposal costs include expenses related to removing or selling the asset
Going concern assumption assumes enterprise will continue operating long enough. Notes to financial statements provide information about financial position. Net income equals revenues minus expenses and dividends
Depreciation and amortization are methods for spreading asset costs over time. Depreciation covers tangible assets, amortization covers intangible assets. Both methods are recorded on income statement and used in EBITDA calculation
Both methods calculate value of business assets over time. Amortization spreads intangible asset costs over useful life. Depreciation spreads fixed asset costs over useful life
Salvage value is the estimated book value of an asset after depreciation. Companies may depreciate assets fully to $0 due to minimal salvage value. Salvage value can be calculated as percentage of cost or through appraiser
FV calculates future value with constant interest rate and periodic payments. PV determines present value using FV formula. NPV sums positive and negative cash flows over years. PMT calculates periodic payments for loan repayment