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VCE Stuff => VCE Mathematics => VCE Mathematics/Science/Technology => VCE Subjects + Help => VCE General & Further Mathematics => Topic started by: Stick on October 13, 2012, 04:38:47 pm

Title: Business Math technicalities
Post by: Stick on October 13, 2012, 04:38:47 pm

So I've come across two unusual questions today and I need to confirm the following:

1. When an item reaches its scrap value, do we assume the owner sells it at that price?

2. If an investor starts making regular investment instalments and a principal value is not stated, is the principal value 0 or the payment value?

Title: Re: Business Math technicalities
Post by: bucklr on October 13, 2012, 04:52:03 pm

For number one: that's an accounting question. When a non current asset reaches its scrap value it's at the end of its life in the business. Very technically speaking the asset is sold and the amount is either above or below the scrap value... This results in a profit or loss on the disposal.

It's an acccounting question so I wouldn't worry.