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What is the capitalized cash flow method?


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.

538 day(s) ago

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Answers (3)

noamnoam 		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.

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ujonesla 		i dont know

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ujonesla 		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

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