Present value factor

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Present value factor

Factor used to calculate an estimate of the present value of an amount to be received in a future period. If the opportunity cost of funds is 10% over next year, the factor is [1/(1 + 0.10)].

Present Value Factor

An estimate of the present value of future cash flow for a project.
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If MP discounting is, in fact, the best fit for a particular property type in terms of computing present value factors to apply to NOL it follows that values derived by BOP discounting and EOP discounting are both inaccurate to the extreme.
Within the process of income valuation analysis, the appraiser must select the frequency of compounding of interest in order to compute present value factors for income capitalization and discounting.
This is accomplished by discounting each after-tax cash flow through the use of present value factors reflective of the age of the cash flow.

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