When doing a sale versus lease analysis,how should the residual value of the property be estimated?

Question

Quizplus · Accepted Answer

Assuming the residual value of the property is equal to its market value is the most reasonable choice for estimating the residual value of a property. This is because market value is based on the supply and demand for the property at the time of the analysis, and reflects its current value in the marketplace. It is a more sound estimate compared to assuming it is worthless or equal to the original purchase price, which may not consider possible appreciation or depreciation of the property over time. Setting it equal to the book value may not be appropriate as book value is an accounting measure and may not reflect the true market value of the property.

When Doing a Sale Versus Lease Analysis,how Should the Residual