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Income approach method
Leydi Yazmin Cordero Lizcano
Created on April 15, 2024
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Definition of the topic
A The Income-Based Approach is one of the three best methods of "income" valuation used by appraisers.
Leydi Yazmin CorderoGroup: 212032_58 April 10, 2024
Mathematical formulas for calculating the Income Approach Method
¿How can companies create value from their innovation?
Income approach method
Universidad Nacional Abierta y a Distancia UNAD
When the income approach is used, PIB is calculated by adding these four components, in equation form it would look like this: PIB= RA + EO + II – SUBS.
Income approach method
Analysis based on the present value of an asset considering future benefits derived from the property and is generally measured through the capitalization of a specific level of income.
Value can be created based on your current cash flow, your annual rate of return, and your projected future value. When using this method for the income approach, use the following formula: (Annual Future Income/Required Rate of Return) = Market Value