Financial Modeling
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Quick question: if we can't have the residual value of a company's depreciate assets; does that mean we could very well over estimate the depreciation expense? Ex. A company has $1000 of machinery and Equipment at the beginning of the period and with 3 years of life. However, without knowing that the residual value of the asset would be, let's say, $200 which leaves us $800 worth of depreciation over 3 years. Now, without knowing what the residual value would be we would have to depreciate the full $1000 for the life of the asset. Is this correct? Many thanks. Read More