What process is used in capitalization to express anticipated future benefits?

The process of capitalization of income is specifically designed to express anticipated future benefits by converting future income into a present value. This approach is used to determine the value of an income-producing property by taking the expected revenue it will generate and converting that into a capitalized value.

In this methodology, appraisers use the income generated from the property, subtract any operating expenses, and apply a capitalization rate to assess the profitability of the investment over time. This provides potential investors with an understanding of how much they should be willing to pay for the property based on its expected income.

By focusing on future benefits, capitalization of income directly ties the valuation to the income potential of the property, making it a vital tool in the appraisal process for income-generating assets.

The other options, while related to valuation and market analysis, do not specifically address the anticipated future benefits in the same direct way that capitalization of income does. Estimating market value is a broader concept that can encompass various appraisal methods. Comparative market analysis focuses on comparing similar properties in the market to establish value rather than assessing future income. Discounted cash flow analysis is more complex and involves projecting cash flows over several years and discounting them back to present value, but it is not specifically referred to as