The Student Handbook to T HE A PPRAISAL OF R EAL E STATE 1 Chapter 24 Discounted Cash Flow Analysis and Special Applications in Income Capitalization.

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Presentation transcript:

The Student Handbook to T HE A PPRAISAL OF R EAL E STATE 1 Chapter 24 Discounted Cash Flow Analysis and Special Applications in Income Capitalization

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 2 Applicability of Discounted Cash Flow Analysis Both yield capitalization and direct capitalization require an estimate of next year’s net income. Discounted cash flow analysis requires more than one year’s estimate. Several years’ estimates of income, vacancy, collection losses, and expenses are required.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 3 Discounted Cash Flow Analysis of a Small Retail Center

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 4 Discounted Cash Flow Analysis of a Small Retail Center, continued

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 5 Discounted Cash Flow Analysis of a Small Retail Center, continued

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 6 Calculating Net Present Value

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 7 Calculating Net Present Value

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 8 Payback Period

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter 24 9 Profitability Index

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Problems Suggested solutions begin on page 432. Chapter 24 10

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter Case Study: Analysis of an Office Building Investment

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter Case Study: Analysis of an Office Building Investment, continued

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Chapter Value Opinion – Case Study

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