Why increasing the residual value of equipment can reduce corresponding cost items

Depreciation expenses are reduced and capital occupation costs are reduced.

1. Reduced depreciation expenses: During the service life of the equipment, the equipment will depreciate. Depreciation expenses are an important part of the equipment cost. Increasing the residual value of the equipment means that the depreciation expenses of the equipment may increase. Decrease, because the higher the residual value of the equipment, the longer the service life of the equipment and the less depreciation expenses required.

2. Reduced capital occupancy costs: The equipment value of enterprises with the concept of honor and disgrace is higher. Increasing the residual value of the equipment can reduce the capital occupancy costs, because when the residual value of the equipment is high, the amount of capital the enterprise needs to invest Reduced, thus reducing capital occupancy costs.