Why the same machine has four different values

Ask four people what a CNC lathe is worth and you may get four defensible answers, because they are answering four different questions. This is the single most common source of confusion in equipment valuation, and the single most common defect in equipment appraisals prepared elsewhere.

Fair market value in continued use assumes the machine stays installed and operating as part of a going concern. Fair market value removed assumes it is sold and taken away. The difference covers installation, rigging, and the value of an operating configuration.

Orderly liquidation value assumes a reasonable marketing period. Forced liquidation value assumes an auction on a compressed timeline. Across those four premises the spread on identical equipment routinely exceeds fifty percent.

The lender, the trustee, the divorcing spouse, and the insurer each need a different one. The report must state which premise was applied and why — and an appraiser who does not ask the intended use before quoting is not going to get it right.