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This method accounts for both the mortgage payment and the cash invested when determining the value. It's more worthwhile if you plan to finance rather than pay for the property in cash. You'll first need to calculate thesinking fundfactor (SFF), which is essentially the amount you need to...
We should note that FFO gets closer to cash flow than net income, but it does not capture cash flow. Mainly, notice in the example above that we never counted the $1 million spent to acquire the building (the capital expenditure). A more accurate analysis would incorporate capital expenditur...