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I guess you are talking about valuation for acqusition, not evaluating.

In this case, the dam is a revenue generating asset no different than a property. You need a reasonable projection of the price of electricity and do an income analysis.

However, the dam needs equipment and maintenance, which are age dependent. Depending on its geographic location, it can also be a liability to the neighborhood so insurance could be high.

When you put the income and expenses together, you have an idea how long will the asset continue to perform.

2007-02-08 05:52:04 · answer #1 · answered by Sir Richard 5 · 0 0

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