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Gnom [1K]
4 years ago
15

When using discounted cash flow analysis for valuation, the appraiser must estimate the sale price at the end of the expected ho

lding period. This price is referred to as the property's
Business
1 answer:
EastWind [94]4 years ago
5 0

Complete Question:

When using discounted cash flow analysis for valuation, the appraiser must estimate the sale price at the end of the expected holding period. This price (assuming selling expenses have yet to be accounted for) is referred to as the property's:

Group of answer choices

A. net sale proceeds

B. selling expenses

C. terminal value

D. current market value

Answer:

C. Terminal value.

Explanation:

When using discounted cash flow analysis for valuation, the appraiser must estimate the sale price at the end of the expected holding period. This price (assuming selling expenses have yet to be accounted for) is referred to as the property's terminal value.

Terminal value can be defined as the discounted value of all cash flows for a property after its forecast period or investment time in discounted cash flow analysis.

<em>This ultimately implies that, the property's terminal value is primarily used for the estimation or determination of its value based on future cash inflow. </em>

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3 years ago
The present value of a cash flow will _________ be less than the future dollar amount of the cash flow
nata0808 [166]

The present value of a cash flow will always be <u>less</u> than the future dollar amount of the cash flow.

<h3>What is the present value?</h3>

The present value is the value of future cash flows discounted by the discount rate to today's value.

Discounting converts a future value to an equivalent value received today. Discounting measures the relative value of a series of future cash flows to a present value.

For example, if $500 is to be received in ten years, with a discount rate of 5%, its present value will be $307 ($500 x 0.614).

Thus, the present value of a cash flow will always be <u>less</u> than the future dollar amount of the cash flow.

Learn more about the present and future values at brainly.com/question/15904086

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