VALUATION - What is it |
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Valuation is
an exercise falling primarily within the domain of economics as well as
law. Valuation really concerns itself with all species of legal interests
arising out of land and building as well as plant and machinery which
are exchanged for money and therefore entails the phenomena of exchange,
scarcity and choice that characterizes a market in the economic sense
of the term. Property is purchased both for use and as investment; but
in both cases the purchaser measures the expected return or benefits to
be received from the property against the cost outlay. The valuer task
is to express these benefits in money terms and to interpret the relationship
between cost and benefit as a rate of return, thus allowing the investor
to make a choice between alternatives.
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