The Valuation of Used Capital Assets During Time Periods Exhibiting Alternative Degrees of Demand for Industrial Machinery and Equipment

Abstract

The purpose of this study is to construct a valuation model for used capital assets during time periods exhibiting alternative degrees of demand for industrial machinery and equipment. A data base containing approximately 45,000 new, used, and salvage price data was analyzed for the three diverse demand years of 1973, 1976, and 1980. The data base encompassed most of the standard specifications of industrial machinery and equipment utilized by business enterprises in various industries. The results indicate that the relationships among new current value, used current value, and salvage value are relatively constant over the diverse demand years. In addition, the results demonstrate that machine tools appear to retain the highest relative used value in the industrial machinery and equipment field; whereas medical and laboratory testing equipment possess a minimal used value due to the extreme technological changes in that field.