Final answer:
Salvage value should not be used to justify marginally profitable investments due to its unpredictability, and economic decisions often involve marginal analysis and trade-offs, comparing current costs to future benefits.
Step-by-step explanation:
The student's question pertains to salvage value and its role in investment decisions. Salvage value is the estimated residual value of an asset at the end of its useful life. Since salvage values are difficult to accurately predict, option C states that they should not be used to justify marginally profitable investments.
Marginal analysis, which compares marginal costs to marginal benefits, can indicate that if the marginal costs of an investment exceed the marginal benefits, the resources could be better utilized elsewhere in the economy.
It's important to remember that economic decisions often involve marginal analysis and trade-offs. Furthermore, decisions should be made based on the present discounted value of future benefits, which requires comparing current costs to future benefits.
Considering these points, the best answer to the question would be E) A and C, meaning that salvage value is a best guess of the future sale price, but shouldn't be used to justify marginal investments due to their unpredictable nature.