kanajahbunn
kanajahbunn
03.04.2020 • 
Business

To overcome the potential shortcomings of single-year decision making metrics, many investors in real estate also perform multiyear discounted cash flow (DCF) valuation. DCF valuation differs from the single-year ratio analysis in all of the following ways EXCEPT:
A. Only with DCF must the investor estimate an appropriate investment horizon accounting for how long she will hold the property.
B. Only with DCF must the investor select the appropriate yield at which to discount all expected future cash flows.
C. Only with DCF must the investor make explicit forecasts of the property's net operating income for each year in the expected holding period.
D. Only with DCF must the investor use defensible cash flow estimates that incorporate appropriate measures of income and expenses, long-term trends, comparable properties, and social / legal environment conditions.

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