Application of discounted cash-flow (DCF) models in the valuation of investment properties in Nigeria Online publication date: Tue, 29-Nov-2016
by Mohammed Ishaq Mohammed; Modupe Morenke Omirin; Ibrahim Musa Singhry; Umar Auwal
International Journal of the Built Environment and Asset Management (IJBEAM), Vol. 2, No. 1, 2016
Abstract: The purpose of this paper is to assess the level of application of the Discounted Cash Flow Models among Nigerian valuers. A questionnaire survey was conducted in 2011 where sample of estate surveying firms was drawn from Lagos and Abuja, using stratified and snowball sampling techniques. A total number of 240 questionnaires were administered out of which 161 were retrieved and analysed using the Statistical Package for Social Sciences (SPSS) version 17. The study revealed that there is very low usage of the DCF-based models by Nigerian valuers. The impression that requirement of valuation clients in Nigeria do not warrant the use of the models, the non-inclusion of the models in the country's higher educational institutions curricula, the perceived difficulty of the models and the failure of regulatory body to enforce their usage were identified as major factors hindering the adoption of these models among the surveyed respondents.
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