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INCOME APPROACH VALUATION METHOD

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Created on March 26, 2020

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JUAN CARLOS ANAYA SOTO

INCOME APPROACH VALUATION METHOD

212026_76

26 MARZO 2020

The income approach is a type of real estate appraisal method that allows investors to estimate the value of a property based on the income the property generates. It’s used by taking the net operating income (NOI) of the rent collected and dividing it by the capitalization rate. It’s also known as the income capitalization approach.

REAL OPTIONS

A real option is a choice made available to the managers of a company with respect to business investment opportunities. It is referred to as “real” because it typically references projects involving a tangible asset instead of a financial instrument. Real options are choices a company’s management makes to expand, change or curtail projects based on changing economic, technological or market conditions.

COST APPROACH

The cost approach is a real estate valuation method that surmises that the price a buyer should pay for a piece of property should equal the cost to build an equivalent building. In cost approach appraisal, the market price for the property is equal to the cost of land plus cost of construction, less depreciation. It yields the most accurate market value when the property is new.

GHEŢA, I. M. (2017). Theoretical and Methodological Considerations Regarding the Evaluation of Intangible Assets. (pp 373–376). Contemporary Readings in Law & Social Justice, 9(2). Retrieved from http://bibliotecavirtual.unad.edu.co/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=126542114&lang=es&site=eds-live&scope=site Mc Manus, J. P. (2012). Intellectual Property : From Creation to Commercialisation: A Practical Guide for Innovators & Researchers. 16. Valuation of Intellectual Property. Oak Tree Press. Retrieved from http://bibliotecavirtual.unad.edu.co/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=1008965&lang=es&site=eds-live&scope=site&ebv=EK&ppid=Page-__-20 Cohen, J. A. (2005). Intangible Assets : Valuation and Economic Benefit (pp 84-87). Hoboken, N.J.: Wiley. Retrieved from http://bibliotecavirtual.unad.edu.co/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=130922&lang=es&site=eds-live&scope=site&ebv=EB&ppid=pp_C1

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