Income approach method

Income approach method

Laura Gisell Ortiz Bello Group 166 04 March 2024

The income approach measures all income, wages, interest, rent, and profits received by all factors of production. The Income Approach is based on the Anticipation Principle, whereby future net monetary benefits are converted into an estimate of Present Value, using a discount rate appropriate to the type of asset under study.

mathematical formulas

- It is possible to express the income to GDP approach formula as follows: Total national Income + Sales taxes + Depreciation + Net income from external factors. -It is calculated by dividing the net operating income the capitalization rate. PIBcf = RA + EBE

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