How is 'flip' calculated for a vehicle sale?

The term 'flip' in the context of vehicle sales refers to the profit gained from the transaction when a vehicle is sold. The calculation of 'flip' is primarily focused on the difference between what a vehicle is worth in the wholesale market and its book value after depreciation.

The correct approach to calculating 'flip' involves taking the undamaged wholesale value, which reflects the market value of the vehicle in excellent condition, and subtracting the reduced book value—this accounts for the vehicle's depreciation and any wear and tear over time. This calculation computes how much profit can be realized after considering the actual worth of the vehicle against what is recorded on the books. This method is particularly relevant for businesses dealing with purchasing and reselling vehicles, where understanding both wholesale value and depreciation plays a critical role in financial assessments.

The other options present different methods of valuation that do not accurately capture the essence of the 'flip' calculation in vehicle sales, as they either involve different financial metrics or do not focus on both wholesale and market dynamics adequately.