If there is no equipment salvage value, the simple return rate is 20%.
What is a simple return rate?
The initial investment value is subtracted from the investment's current value, and the result is divided by the original investment value to determine a simple rate of return. The result is multiplied by 100 to be reported as a percentage.
The initial investment value is subtracted from the investment's current value, and the result is divided by the original investment value to determine a simple rate of return. The result is multiplied by 100 to be reported as a percentage.
What is equipment salvage value?
The estimated value of an asset when it is no longer useful to your company is known as salvage value.
For instance, if a company's machinery has a lifespan of five years but only has a worth of $5,000 at the conclusion of that time, the salvage value is $5,000.
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