Investment Value Depends on Investment Value

dc.contributor.authordeRoos, Jan A.
dc.contributor.authorCorgel, John B.
dc.date.accessioned2020-09-04T01:58:49Z
dc.date.available2020-09-04T01:58:49Z
dc.date.issued2003-07-01
dc.description.abstractUsers of discounted-cash flow models for estimating real estate investment values encounter the following problem: the unknown value being estimated depends on inputs to the model that rely on the unknown value. The models, therefore, produce biased estimates of investment value unless iterative or simultaneous solutions are found. The market value literature addresses this problem by invoking simultaneous solutions. Parallel approaches for estimating investment value are hampered by complications resulting from the need to incorporate income tax effects. As shown in this paper, serious estimation bias results from first-run solution models in modern real estate text books and commercially available computer programs. Closed-form solutions for a variety of investment value models are obtainable to remove the estimation bias.
dc.description.legacydownloads2003_19_28_de_Roos___Corgel.pdf: 378 downloads, before Aug. 1, 2020.
dc.identifier.other5721822
dc.identifier.urihttps://hdl.handle.net/1813/70590
dc.language.isoen_US
dc.relation.ispartofseriesCornell Real Estate Review
dc.rightsRequired Publisher Statement: © Cornell University. Reprinted with permission. All rights reserved.
dc.subjectreal estate financial analysis
dc.subjectinvestment criteria
dc.subjectreal estate finance theory
dc.titleInvestment Value Depends on Investment Value
dc.typearticle
local.authorAffiliationdeRoos, Jan A.: Cornell University jad10@cornell.edu United States of America
local.authorAffiliationCorgel, John B.: Cornell University jc81@cornell.edu USA
schema.issueNumberVol. 2
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