The Market Value of in Use Industrial Machinery

This paper proposes an estimation model of in use industrial machinery. The model is based on the cost approach (depreciated replacement cost). The model starts from the classification of the factors that contribute with different way to decrease the original value of the machinery. Value-time functions were constructed for the three main depreciation factors: age, income decay, obsolescence. Empirical formulas have been developed to estimate the market value of in use industrial machinery on the basis of quantitative and qualitative analysis of depreciation functions. The application of this procedure requires the preliminary typological classification of the machinery, the value of new machinery and the probable duration under new conditions