By law, the deduction is for the discounted present value of the remainder interest, and it must be at least 10% of the original contribution.
The classic way to value businesses, which has kept many a professor sketching formulas on the blackboard, is to compute the discounted present value of their future cash payouts.
Just as the price of a share should equal the discounted present value of future profits, so the price of a house should reflect the future benefits of ownership either rental income or the implicit rent saved by an owner-occupier.
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Just as the value of a company's shares should equal the discounted present value of its future profits, so the price of a house should reflect the future benefits of ownership, either as rental income or in the rent saved by an owner-occupier.
Just as the price of a share should equal the discounted present value of future dividends, so the price of a house should reflect the future benefits of ownership, either as rental income for an investor or the rent saved by an owner-occupier.
Begin, I told him, with a simple model in which future cash flows are discounted to a present value.
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Louis Woodhill, following on the work of Art Laffer, developed a framework for judging whether any given amendment to current tax law pays for itself or is self-defeating by analyzing the change in the present value of revenues discounted out to the infinite horizon produced by the tax amendment.
The value of an operating asset are the net present value of expected free cash flows discounted to infinity.
It states that the value of any investment is the present value of all future cash flows discounted by a risk factor.
The net present value of any economic project is the sum of its discounted future cash flows.
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