The Expected Stream of Rental Income Is Capitalized into Value

question 10

Multiple Choice

The expected stream of rental income is capitalized into value by converting expected future cash flows into present value through a process called:

• A) amortization
• B) discounting
• C) compounding
• D) accounting

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Definitions:

Marginal Revenue

The additional income earned from the sale of one more unit of a product or service.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Total Revenue

Total Revenue is the total amount of money received by a company from its sales of goods or services, before any expenses are subtracted.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product.