Years purchase revisited: quarterly in advance cash flows

Michael Patrick

Journal of Property Investment & Finance, 2015, vol. 33, issue 3, 291-298

Abstract: Purpose - – The purpose of this paper is to explain the derivation of the years purchase (YP) quarterly in advance formula. Design/methodology/approach - – This education briefing is an overview of the YP quarterly in advance formula in the context of the UK real estate market. Findings - – Whilst arithmetically more precise than market practice it lacks a compelling reason to be adopted in its place. Practical implications - – Understand the effect on stated yields of using annually in arrears, rather than quarterly in advance, assumptions. Originality/value - – This is a review of existing models.

Keywords: IPD; Valuation; Advance; Annuity; IPF; YP (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpifpp:v:33:y:2015:i:3:p:291-298

DOI: 10.1108/JPIF-02-2015-0015

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