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    Three methods of valuation: discuss, provide examples

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    Discuss the approach to estimating the value of investment. Can you provide an example of the three methods mentioned?

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    There are three classic valuation approaches: income approach, market approach and cost approach.

    The income approach measures the present value of the future benefits, typically cash flows, expected from the investment. If you used the income approach for a piece of rental property, you would estimate future rents and expenses and discount the net cash flow to ...

    Solution Summary

    Discussion is 250 words in everyday language suitable for a novice. An example is given for each.