Residual Forecasts

One of the most important tasks for the CTO / Asset manager is the analysis and calculation of equipment residual values. There are no magic formulas or short cuts and there are many variables that can affect the ultimate forecast on any, costly, asset. There are a variety of variables that can affect the residual value and the marketability of your owned assets. Discounting practices, transferability of the software, bundling of the maintenance into the cost of the equipment, and the inclusion of any financing of soft costs in the lease payments may determine if the leasing or end-user company is making a good or bad investment decision. At DMC we try and analyze the marketplace for each asset we review based on the conditions above. These reports are used as the backbone in the forecasting module for our reports. In addition to these values we then factor in new enhancements and upgrades, new models, new chip technologies and many other factors to finalize the forecasts.

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Fair Market Values

Fair Market Value (FMV) is defined as the estimated amount, expressed in terms of money, that may reasonably be expected for the equipment, in exchange, between a willing buyer and a willing seller, neither under any compulsion to buy or sell, with both parties reasonable cognizant of all relevant facts and circumstances. OLV is Orderly Liquidation Value. OLV is the estimated gross amount expressed in terms of money, that could be typically realized from a liquidation sale, given a reasonable period of time to find a purchaser, with the seller being compelled to sell on an as-is where-is basis, as of a specific date.

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Vendor Discounts

One of the most important tasks for the equipment manager is the analysis and calculation of equipment residual values. There are no magic formulas or short cuts and there are many variables that can affect the ultimate forecast on any high tech asset. There are a variety of variables that can affect the residual value and the marketability of high tech assets. Discounting practices, transferability of the software, bundling of the maintenance into the cost of the equipment, and the inclusion of any financing of soft costs in the lease payments may determine if the leasing company made a good investment or bad investment. At DMC we try and analyze the marketplace for each asset we review based on the conditions above. These reports are used as the backbone in the forecasting module for our reports. In addition to these values we then factor in new enhancements and upgrades, new models, new chip technologies and many other factors to finalize the forecasts.

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