Can you provide the full question? As Arpit said, for calculating GAAP depreciation expense, you use salvage value unless you're using a declining balance method. For US Tax purposes, however, salvage doesn't exist. And as far as "investment decisions" go, these should ideally be based on discounted cash flows, not GAAP earnings.
The specific nature of the question will help us clear up your confusion.
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David Barrett
Academic
University of Maine
Hampden ME
United States
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Original Message:
Sent: 10-15-2019 09:14 AM
From: Arpit Amar
Subject: Question on Investment decision
You need a depreciable base for calculating the depreciation. Except double declining method, salvage value is used for calculating the depreciable base.
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Arpit Amar
Controller
Original Message:
Sent: 10-15-2019 08:15 AM
From: Ananthu Sajeev
Subject: Question on Investment decision
Would salvage value be considered while calculating depreciation? I heard not to consider salvage value but the questions in wiley has salvage value. Help please.
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Ananthu Sajeev
Student
Ernakulam
India
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