If a project has a salvage value greater than zero, the salvage value will increase the net present value.
Net present value is the present value of after-tax cash flows from an investment less the amount invested. Salvage value is the value that can be gotten from an asset at the end of its useful life.
If the salvage value is greater than zero, it would increase the cash inflows to the owner of the asset and this would increase the value of the net present value.
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If a project has a salvage value greater than zero, the salvage value will B. increase the net present value.
The salvage value is the estimated value of an asset after full depreciation.
For instance, if an asset valued at $500 can be sold for $50 after depreciating it fully, the salvage value is $50.
Thus, if a project has a salvage value greater than zero, the salvage value will B. increase the net present value.
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