What is the capitalized cash flow method?

Question

I came upon a term I did not fully understand. What is the capitalized cash flow method for assessing a rental properties value? Ten points for who ever answers first and provides a reference.

Answer 1

Value is annual cash flow divided by rate of return desired. If cash flow is 100,000 per year and the desired return is 10%, then the property would indicate a price of $1,000,000 if there are no mitigating factors.

Business merger/acquisition valuations are similar--
http://www.mergers-acquisitions.com/valu.shtml

Answer 2

sources of money: increasing internet sales, shrink in non-mounted sources, develop in liabilities, capital/fairness injection makes use of of money: lowering internet sales, lowering liabilities, develop in non-mounted sources, capital/fairness withdrwals/distributions. whilst observing financials, listed right here are the three speedy issues to seek for : a million. Liquidity - use metric for sources/makes use of of money. The ratios might desire to be trending upward. A especially liquid business enterprise has the skill to fulfill its little while era debt responsibilities and/or pay its vendors. 2. Leverage - what's the relationship btw debt and fairness/internet properly worth. generally, you like a minimum of 80% of total liabilities divided by technique of fairness; in any different case the business enterprise is overly leveraged and/or under capitalized. this means that it does not teach sufficient fairness to cover creditor risk. 3. Profitabaility - internet sales might desire to be increasing, expenses might desire to be stabilized.

Answer 3

Hope this one will help... http://www.camagazine.com/index.cfm/ci_id/22556/la_id/1.htm

I studied accounting 3 yrs ago. Sad to say, i can't think any words to simplify the answer for this one. Consult an accounting practitioner.

Answer 4

i dont know