Explore commonly used personal finance terms.
Abandonment value is the estimated amount a business or investor could recover by liquidating an asset or halting a project. It is essentially the “salvage” or residual value after considering selling costs, shutdown costs, and potential revenue from asset disposal. This metric is often used in capital budgeting to assess whether it’s more financially viable to continue a project or abandon it. Understanding abandonment value helps businesses avoid losses by identifying financially inefficient projects or underperforming assets.
