> Why is residual value added to the cashflow before discounted in calculating the npv of a machine?

Why is residual value added to the cashflow before discounted in calculating the npv of a machine?

Posted at: 2014-12-05 
Generally because it's assumed you could sell the machine for the residual (salvage) value. FYI - Since that "sale price" equals book value at that point, there is no tax consequence - e.g. no taxable gain or deductible loss on sale.