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Article: Comments on discounted cash flow analysis.
- Article from:
- Appraisal Journal
- Article date:
- July 1, 1993
- Author:
CopyrightCOPYRIGHT 1993 The Appraisal Institute. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Just last year, IBM celebrated the 10th anniversary of its introduction of personal computers into the market. For real estate appraisers, personal computers as well as Hewlett-Packard's introduction of the HP-12C have revolutionized the analytical process.
As software has become more sophisticated, the use of discounted cash flow (DCF) analysis has accelerated. Ten years ago, it was a "maverick" analyst who sat down with green columnar pads and worked and reworked cash flows, erasing and adjusting discount factors from the Ellwood tables. Now a DCF analysis is expected and it is nearly always included in a valuation analysis. While everybody is doing it, however, ...