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LSDefine

Simple English definitions for legal terms

capitalized value

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A quick definition of capitalized value:

Capitalized value is a way to figure out how much something is worth, like a house or building. It looks at how much money the thing will make over time and calculates how much it's worth right now. This helps people decide if it's a good investment. To find the capitalized value, you divide the yearly income by a number called the capitalization rate and then take away some money because of inflation and missed interest opportunities, which is called the discount rate. For example, if a townhouse makes $20,000 a year and has a capitalization rate of 8% and a discount rate of 10%, the capitalized value would be $225,000.

A more thorough explanation:

Capitalized value is the current worth of an asset, such as real estate, based on the expected income it will generate over its lifetime. This calculation helps investors decide if an asset is a good investment.

To calculate capitalized value, you divide the expected yearly income by the capitalization rate and then reduce the sum by a discount rate to reflect the present value. The discount rate takes into account the time value of money, which means that future money is worth less than current money due to inflation and missed interest opportunities.

For example, let's say a real estate company wants to invest in a townhouse that generates $20,000 a year with a capitalization rate of 8% and a discount rate of 10%. The capitalized value would be $225,000 ($20,000 ÷ 8% = $250,000*90% = $225,000).

Overall, capitalized value is a useful tool for investors to determine the current worth of an asset based on its expected income over time.

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JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
AHHAHAHAHAHAHHAHAHAHAHAHAH
@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
soyalmondoatmilk
8:38
good morning! hoping waves will come our wave today
8:42
GW wave today?
8:57
There’s someone I found on here with the username threeoutchange and if my understanding is correct that’s a reference to the debut album by a pretty cool 90s-00s Japanese band called Supercar. I geeked a little
8:57
It could just be a baseball reference I don’t get though lol
Dkk
9:00
@renard99: also, the same band that does a song in the anime Eureka 7 which I watched when I was like idk, 12
9:00
Yeah! They are pretty good. Three Out Change is an awesome J-rock record
Dkk
9:01
I will probably not listen to them more but fun fact. Really random to start the day. An omen that the waves will be very random today.
Dkk
9:03
Fuck, reading the wikipedia now. Literal last song they did before they broke up was Storywriter. Wow.
9:05
That one is a masterpiece
9:05
My favorite song by them is Recreation
glovediedthisishismom
9:05
snowing
Dkk
9:07
@renard99: man, hard to find.
Dkk
9:07
@glovediedthisishismom: Congrats on the snow.
Dkk
9:16
@renard99: Poetic and nice.
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