Property Valuation
A Utah commercial appraiser using the discounted cash flow (DCF) analysis is:
AUsing a simplified GRM method
BProjecting future income streams and discounting them back to present value using an appropriate discount rate✓ Correct
CUsing the cost approach for commercial property
DApplying the residential sales comparison approach to commercial property
Explanation
DCF analysis projects a property's future net cash flows and terminal value, then discounts them to present value using an investor's required rate of return (discount rate). It is commonly used for complex commercial properties.
Related Utah Property Valuation Questions
- A paired-sales analysis is used in the sales comparison approach to:
- External obsolescence in Utah might be caused by:
- A capitalization rate for a Utah commercial property in a high-demand area like downtown Salt Lake City tends to be:
- Gross Rent Multiplier (GRM) is used to:
- Over-improvement of a Utah property (building a much more expensive home than typical for the neighborhood) is an example of:
- The principle of conformity in Utah real estate suggests that:
- The effective age of a building refers to:
- Depreciation in real estate appraisal is measured as:
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