16642 Lecture Notes - Lecture 7: Cash Flow, The Terminal, Tax Shield
Document Summary
It is found by the evidences that rents were paid for comparable properties in the same location. Market rent: net rental income is derived from lease terms. Full repairing and insuring lettings (fri): tenant will bear all of the costs and outgoings associated with the property including repairs, insurance, rates, etc. Clear lease: landlord has no actual or contingent liability for outgoings (other than tax). Landlord bears some or all of the outgoings, in which net income that is capitalised to arrive at the capital value. Council and water rates: per quarter. Yield = (cid:3042)(cid:3043)(cid:3047) (cid:3048) (cid:883)(cid:882)(cid:882)% (cid:3047) (cid:3041)(cid:3047) Gross potential income vacancy statutory charges operating expenses = net rental income. Incremental cash flows the cash flows that result from the acceptance of a capital- budgeting project. The key test of an incremental cash flow is the with or without" question.
