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Discounted Cash Flow Method



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PEACHTREE-CASE-STUDY
Discounted Cash Flow Method – a method within the Income Approach whereby the present value of future expected net cash flows is calculated using a discount rate.
Discount Future Earnings Method – a method within the Income Approach whereby the present value of future expected economic benefits is calculated using a discount rate.
Economic Benefitsinflows such as revenues, net income, net cash flows, etc.
Economic Life – the period of time over which property may generate economic benefits.
Effective Date – see Valuation Date.

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Enterprise – see Business Enterprise.
Equity – the owner’s interest in property after deduction of all liabilities.
Equity Net Cash Flows – those cash flows available to payout to equity holders in the form of dividends) after funding operations of the business enterprise, making necessary capital investments, and increasing or decreasing debt financing.

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