The Discounted Cash Flow Model: Concepts, Issues, and Applications

Developed for appraisers with varied appraisal backgrounds, this seminar focuses on the basic concepts and principles of discounted cash flow valuation and modeling. DCF modeling is a powerful tool when properly used and understood.

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Real property appraisers with an interest in DCF modeling

• Recognize the three categories of factors driving income property value.
• Explain why cash flows are discounted.
• Determine present values.
• Explain how the DCF model reflects how the market determines value.
• Understand the theoretical underpinnings of PV, NPV, and IRR.
• Make defensible choices of discount rates.
• Apply both blended and cash flow–specific discount rates to arrive at PV estimates.
• Explain the relationship between the discount rate(s) and the timing of expected cash flows.
• Recognize the unreliable nature of the occasional inaccurate investment forecast.
• Describe basic strategies to minimize the negative impacts of inaccurate investment forecasts.

None

No Exam

Intermediate

Attend: 55 AI Points

5 hours

No

Online Syllabus

• A financial calculator is required. The accepted model used in the program is the HP-12C. AI education programs that require a financial calculator are developed with HP-12C keystrokes; using this model is highly recommended.
• You must be familiar with calculator operation when the program begins. Do not enroll expecting to be taught how to use a financial calculator.
• Free Review: Using a Financial Calculator: Formulas, Symbols, Math Review, and Sample Problems; and Financial Calculator Practice Exercises.
• For additional help with the HP-12C calculator, take our online seminar Using Your HP-12C Financial Calculator.
• HP-12C calculator User’s Manual.

Online Education FAQ

Online Course Access
Go to www.appraisalinstitute.org and log in with the username and password you used when you registered. Click on the red “My Account” button if you are not automatically taken to your account page.
1. Click "Education and Events" on the right navigation menu.
2. Find the course under the “Online Courses” heading and click the “Begin” button.
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Other Details
For information about how on demand online education programs work, registration and cancellation policies, and other details, see our On Demand Online Education Frequently Asked Questions.

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