Abandonment Value financial definition of Abandonment Value
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of an asset
if it were sold
immediately and all debts
associated with it were repaid
. That is, the abandonment value is what would be left over after an asset is sold and all the bills were paid. It is also called the liquidation value. See also: Market Price
References in periodicals archive
and Abandonment Decisions: A Clarification," Journal of Finance, 40: 1225-1228.
If the abandonment value
is $110,000 in each case, the decisions are obvious: asset A should be abandoned; assets B and C should be retained.
Van Horne, "Abandonment Value
and Capital Budgeting," Journal of Finance (December 1967), pp.
Long, "Abandonment Value
and Capital Budgeting: Comment," Journal of Finance (March 1969), pp.