Residual value is:
A)past outlay of a project that has no bearing on future costs or benefits.
B)the portion of initial capital outlay that will be recovered.
C)past outlay,which should not influence the decision between continuing and terminating a project.
D)cost associated with exploration.

Question

Quizplus · Accepted Answer

Residual value is the estimated value of an asset at the end of its useful life. In the context of a project, it is the portion of the initial capital outlay that will be recovered. Therefore, option B is the correct answer. Option A is incorrect because past outlay can affect future costs and benefits. Option C is incorrect because the past outlay has to be considered while making termination or continuation decisions. Option D is incorrect because exploration costs are not related to residual value.

Residual Value Is