a building was purchased for $68,000. the asset has an expected useful life of eight years and depreciation expense each year is $5,000 using the straight-line method. what is the residual value of the building?

What is residual value?
The estimated value of the a fixed asset at the conclusion of its lease term as well as useful life is the residual value, also referred to as salvage value. In lease agreements, one of the lessor's main methods for figuring out how much the lessee must pay in periodic lease payments is the residual value. In general, an asset's residual value decreases as its useful life as well as lease period lengthens. Although the formulas for residual value vary by industry, the fundamental concept—what remains—remains the same. In capital budgeting projects, residual values represent the price at which an asset can be sold after the company has stopped using it or when it is no longer possible to predict the asset's future cash flows. The residual value for investments is determined as the difference between profits as well as the cost of capital.

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