In which of the following approaches the capitalization of an income is done?

Question

Quizplus · Accepted Answer

The capitalization of an income is typically done through the multiple of earning approach. This approach involves using a multiple (such as 10 times) of the annual earnings (such as net income) to determine the value of a company or asset. The present value approach involves discounting future cash flows to their present value, while the communicative and integrated eclectic approaches are not typically used to directly determine the value of an income.

In Which of the Following Approaches the Capitalization of an Income