Author's Response

摘要

Market participants consistently use internal rate of return as a standard measurement in residential development. The article demonstrates that with proper analysis and application the discount rate and internal rate of return are essentially the same (Tables 5-7). It is acknowledged that a discount rate is applied when solving for a land value via a subdivision development discounted cash flow and that when land cost is the known, and included as a cost, an internal rate of return can be calculated. Given that internal rate of return is the standard vernacular of market participants and market surveys, it is important that appraisers use the same.