When using discounted cash flow analysis for valuation, an appraiser will prepare a cash flow forecast, often referred to as a:
A) restricted appraisal report
B) net operating income statement
C) direct market extraction
D) pro forma

Question

Quizplus · Accepted Answer

When using discounted cash flow analysis for valuation, an appraiser will prepare a cash flow forecast, which is often referred to as a pro forma. The pro forma is a financial statement that reflects the expected cash inflows and outflows of a property over a specific period of time. It is used to calculate the net present value of future cash flows, which is the basis for the discounted cash flow analysis.

When Using Discounted Cash Flow Analysis for Valuation, an Appraiser