Term
What is the "capitalization rate"? |
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Definition
the expected stability in the rental income that a building could generate if it were rented.
Calculation:
amount of rental income / the buildings price
Higher rates indicate that the expectation is risky |
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Term
Present value of an infinite series |
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Definition
First "Perpetuity" Cash Flow / (discount rate - growth rate)
Then discount further if necessary |
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Term
Adjusted Replacement Cost |
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Definition
(Cost to duplicate - Salvage Value) / Useful Life = "depreciation" per year
Years Used * "depreciation per year" = total "depreciation"
Cost to duplicate - "depreciation" = adjusted replacement cost |
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Term
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Definition
Level 1 inputs - quoted prices in active markets for identical assets (or liabilities)
Level 2 inputs - observable inputs other than quoted prices in active markets for identical assets (or liabilities)
Level 3 inputs - unobservable inputs |
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