Investopedia explains 'Scrap Value'
For example, John has a very old car with a transmission that is shot. Because the cost to replace the transmission ($2,000) is significantly more than what the car would be worth even with a working transmission ($1,000), John decides to sell the car for its scrap value. He takes it to a junkyard where the car's usable parts and metal are valued at $500. Therefore, $500 is the car's scrap value.
|