Salvage value, definition

Line 13 gives the annual cash flows for each of the operating years with the zero-year column giving only the total capital investment. In line 16, the present value of the annual cash flows to the project is obtained by summing the individual present values for each year of operation including the present value of the working-capital and salvage-value recovery at the end of the service life. Line 17 merely applies the definition of net present worth as used in this text as the difference between the total present value of the annual cash flows to the project and the initial required investment. 

The use of fixed capital investment, FCI, in the calculations for payback period and rate of return on investment given above seems reasonable, because this is the capital that must be recovered by project revenue. Many alternative definitions for these terms can be found, and the reader will find that total capital investment (FCI + WC + Land) is often used instead of fixed capital investment. When the plant has a salvage value (S), the fixed capital investment minus the salvage value (FCI - S) could be used instead of FCI. However, because the salvage value is usually very small, we prefer to use FCIj alone. Example 10.1 is a conprehensive profitability analysis calculation using nondiscounted criteria. 

Place (he bottle with contents in a chamber maintained at 65.5°il°C (See Fig oa p 28 of Ref 12 and on p 49 of Ref 13), the air in which is preferably maintained in constant circulation After (he bottle with contents has been heated for 24 hrs, reseat (he stopper. Make daily observation of the appearance of the sample and note the number of days required to cause (he liberation of visible reddish or brownish fumes of oxides of nitrogen Note It has been customary to consider any proplnt having a test value of 90 days or less to be of definitely impaired stability and any proplnt having a test value of 20 days or less to be sufficiently unstable as to require destruction or salvage... 

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