Discounted Cash Flow Analysis
Investment Analyst uses both the Discounted Cash Flow Method and the Advanced
Mortgage Equity Technique estimate value. One method is used to check and
prove the other. This makes Analyst unique among income analysis tools and provides a level of confidence in your analyses that cannot be
achieved using only the Discounted Cash Flow method.
To determine the value of cash flows produced by a property using the Discounted
Cash Flow method, certain steps must be completed. Determine the Required
IRR, financing terms (if any are to be included), the holding period (1
to 50 years can be accommodated by Investment Analyst), the Terminal Value
at the end of the holding period, and the costs associated with the acquisition
Finally, net income and net cash flows are determined and discounted. Our
Discounted Cash Flow Analysis Report is carefully designed to clearly document
each critical variable and its influence upon the cash flows. The cash
flows are then shown and the discount factors are applied. The report is
self contained for easy review by you and your client.
Included are important
details like cash on cash yield, debt coverage ratio, and Internal Rate of
Return calculation; in addition to the discounting of the cash flows.