Discussion
Under the study-period approach, an alternative outliving the study period is credited with
Answer: B
Correct answer: an estimated market value at the end of the period
Cutting the analysis short at the study period does not destroy the value remaining in the asset, so that value is brought in as a terminal cash inflow - the price it could actually be sold for at that date. Book value is an accounting figure and the original salvage value applies to a different date, so neither serves.
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