Property Valuation
A discounted cash flow (DCF) analysis differs from direct capitalization in that DCF:
AIs simpler and less accurate
BProjects income and expenses over multiple years and discounts them to present value✓ Correct
CIgnores terminal value
DIs only used for vacant land
Explanation
DCF analysis projects future income and expenses for several years, plus a terminal (reversion) value, and discounts all cash flows to present value using a discount rate, capturing changing income patterns.
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