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    Net salvage value and selling price

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    If a used asset is liquidated for less than its remaining book value, its net salvage value (i.e., net cash flows from the liquidation) will be larger than the sales price. Is the statement true or false? Explain

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    Solution Preview

    This statement is true.

    The book value is greater than the sale price. This implies that there will be a capital loss on sale. The ...

    Solution Summary

    The solution explains whether net salvage value of an asset be larger than the selling price