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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Terminal value
what is terminal value? how is it calculated? (i see no mention of it in BPP)
The views of the directors of Pelta Co are that all investment projects must be evaluated over four years of operations, with an assumed terminal value at the end of the fourth year of 5% of the initial investment cost.
PELTA CO S/D 2017
Thanks in advance
Terminal means final, so here is simply means that the project has a scrap/sale value at the end of the four years of 5% x $25m.