Residual Value Forecasting


There are two important reasons that NACOMEX is called on to forecast the future value of existing computers:
  1. the need for management to efficiently plan and budget for acquisitions and dispositions, and
  2. the growing trend for many businesses to lease rather than purchase computers.


Today, lessors must incorporate realistic residual value forecasts into their lease pricing if they expect to make a profit. Lessees have a similar incentive for accurate residual value forecasts.

The customer making a lease-or-buy decision or choosing the type of lease to sign will need an accurate forecast of value at the end of the equipment’s useful life to make an informed judgment.

Since the future represents an extrapolated extension of the past, we use historical price evidence – both of new equipment and equipment in the resale market – to develop our forecast model. A residual value forecast can be no more reliable than the historical observations upon which its model is based. In fact, the accuracy of historical data is more important for purposes of forecasting residual values than for ordinary appraisals because any inaccuracy of data is magnified over the period of projection.

NACOMEX uses historical price data from its proprietary database which has been verified for accuracy thereby resulting in the most accurate and reliable forecast results.

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