Discounted cash flow

The difference between discounted cash flow (DCF) and traditional valuation methods is that in the former assumptions of rental growth and the required rate of return are explicit whereas in the traditional approach assumptions about growth are implied in the all-risks yield. The Net present value (NPV) or investment worth is user's valuation of the income from the property to this particular purchaser and is calculated by adding the NPV of the future income stream to the purchase price. Cash flows running for several years on a monthly basis may become very long and can be difficult to manage. Users can compress the cash flow, by hiding rows. The new columns depend on the new information specified before user's cash flow. The normal practice of applying a multiplier adjusted for the risk and deteriorating nature of leasehold does not accurately reflect growth in the rent receivable.