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Article: Sales comparison analysis of power-generating assets: the role of structure and time.
- Article from:
- Appraisal Journal
- Article date:
- March 22, 2006
- Author:
CopyrightCOPYRIGHT 2006 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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abstract
Valuing power-generating assets by the sales comparison methodology is complicated by the fact that these assets are often sold in heterogeneous portfolios. This article documents a difference in valuation levels between transactions comprised of homogeneous and heterogeneous portfolios. It also demonstrates that as market conditions change over time, appraisers must reassess how they interpret the historical transaction record to farm an opinion of value by the sales comparison approach. To improve the accuracy of sales comparison analysis for both retrospective and current valuations, a model is developed that integrates the influences of heterogeneity ...