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In price regulated industries, the residual value may be a negative value because it includes the net cash outflow in removing the asset from where it was used. For example, nuclear energy plants must store the nuclear waste at the end of their useful life. This cost is a contributing factor in the residual value. It is also called the salvage value or scrap value. See also: Absolute Physical Life, Obsolescence.
residualsee REGRESSION ANALYSIS.
(1) An amount remaining from an investment after payment of all operating expenses, debt service, reserve funds, and income taxes. The residual remains for payment to the investor.
(2) The value of leased personal property at the end of the lease term. Under an operating lease, a lessee may be given the right to purchase the property for the previously agreed upon residual value.Car leases,copier leases,and heavy equipment leases all work on this principle.