Work out residual value instantly with clear inputs, formula shown and shareable results.
Residual value is normally modelled as geometric decay: a constant percentage of remaining value is lost each year, which matches observed second-hand markets far better than straight-line. A condition adjustment then reflects mileage, hours run, service history and specification.
Geometric residual
Residual = Cost x (1 - Annual loss rate)^Age
Adjusted residual
Adjusted = Residual x (1 + Condition adjustment %)
Cars typically lose 15-20% a year, IT hardware 30-40%, industrial plant 8-12%. Use observed auction or trade data for your asset class.
Loosely, yes, though salvage often means scrap or parts value at the very end of life, while residual value assumes a working asset with remaining life.