Which valuation technique uses internal rate of return and present value techniques to determine fair value?
A) Cost approach
B) Time value approach
C) Market approach
D) Income approach

Question

Quizplus · Accepted Answer

The income approach uses internal rate of return and present value techniques to determine the fair value of a property based on its potential income streams. This method is commonly used for evaluating commercial properties such as rental apartments, office buildings, and retail spaces. The cost approach estimates the value of a property based on the cost of replacing or reproducing it, while the market approach compares the property to similar ones that have recently sold. The time value approach is not a commonly recognized valuation technique.

Which Valuation Technique Uses Internal Rate of Return and Present