The Terminal Value of an asset is the estimated value at the end of the useful life of the asset. For a fixed asset, the terminal value connotes the recoverable or salvage value at the end of the depreciation period. For a business entity or an intangible asset, the terminal value is the value of economic benefits or cash flows beyond the discrete forecast period converted in fair market value by applying an appropriate discount factor. The terminal value is also referred to as residual value. In business valuation analytics, the size of the terminal cash flow included in the total cash flows from which the fair market value is computed matters. If the terminal value cash flow accounts for 50% or more of the total cash flows used in computing the fair market value, the implication is the project cash flows are weak during the forecast period and significant value of the business is in the future. Because of the uncertainties associated with future cash flows, the size of the terminal cash flow should be discounted and reduced under such instances.