Property Valuation
A South Dakota commercial appraisal using discounted cash flow (DCF) analysis considers:
AOnly the first year's NOI
BProjected future income streams discounted to present value at an appropriate discount rate✓ Correct
COnly the replacement cost of the improvements
DThe property's gross rent multiplier over a fixed period
Explanation
DCF analysis projects all future cash flows from a property over a holding period, then discounts them back to present value using an appropriate discount (yield) rate, providing a more sophisticated income approach.
Related South Dakota Property Valuation Questions
- The cost approach to value is most useful for appraising:
- In South Dakota, a 'seller's market' for real estate is typically characterized by:
- In South Dakota, the income capitalization approach converts income into value by:
- In South Dakota, 'physical life' of a building differs from 'economic life' because physical life:
- In South Dakota, which factor would most likely cause a DECREASE in cap rates (resulting in higher property values at the same NOI)?
- Plottage value in South Dakota refers to the increased value that results from:
- An appraiser in South Dakota is valuing a property using the income approach. If the property's effective gross income is $60,000 and operating expenses are $25,000, what is the NOI?
- In South Dakota, which of the following properties would typically be appraised using the cost approach as the primary method?
Practice More South Dakota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free South Dakota Quiz →