One Concern of Appraisers When Using the Sales Comparison Approach

question 9

True/False

One concern of appraisers when using the sales comparison approach is that financing benefits paid for by a seller of a property may result in a selling price for the comparable property that is lower than the market value.

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Definitions:

NPVs

Net Present Values, plural; the calculation of multiple investments' profitability by discounting future cash flows to their present values and comparing them to the initial investment.

Scenarios

In finance and planning, scenarios represent different potential future states or outcomes, used to evaluate the impact of varying conditions on projects or investments.

Certainty Equivalent Approach

A method used in capital budgeting and investment theory that adjusts future cash flows to account for risk, making them equivalent in value to cash flows received with certainty.

Risk-Free Rate

The return on an investment with no risk of financial loss, typically represented by government bonds.