ADMS 3810 Lecture Notes - Lecture 14: Cash Flow, Externality, Flowchart
27 Apr 2018
School
Department
Course
Professor
ADMS 3810
Lecture 14
Value is the present worth of the future cash flow
Price is the amount of money that is actually paid, asked or
offered for a good or service, estimate may be greater, less or
equal to objective value
Cost is a price paid in the past or the cost to construct a building
today, “factory price”
Appraisal Principle
• Supply and demand
• Competition and excess profit
• Substitution
o 2 identical house beside one another, the cheaper one
wins
• Surplus productivity
• Conformity
o Build a 1 million house in 500,000 community isn’t
going to sell for 1 million
• Contribution
o Certain renovation don’t get payback very well
• Externality
• Highest and best use
o Physically possible
o Legally possible
find more resources at oneclass.com
find more resources at oneclass.com
