What is the name of a process that estimates future income and applies a discount rate to determine an investment's present value?

The process that estimates future income and applies a discount rate to determine an investment's present value is known as yield capitalization. This method primarily focuses on the income-generating potential of a property. By projecting the future cash flows that will be generated by the property and then discounting those cash flows back to their present value using a specified discount rate, investors can assess the attractiveness of the investment.

Yield capitalization is particularly useful in evaluating real estate investments where income is a crucial factor. It helps in setting investment parameters and determining whether the property is worth purchasing at a specific price based on its anticipated income stream.

In contrast, market analysis generally involves studying the overall real estate market conditions and trends to make informed decisions about property values and investment viability. Comparative assessment typically entails evaluating a property's worth based on comparable properties in the area. The cost approach focuses on determining a property's value based on the costs involved in replacing or reproducing it, rather than its income potential. These methods do not specifically emphasize the relationship between future income and present value like yield capitalization does.