General Science and Philosophy

   

Basics of Years Purchase

Authors: Betasha Felix Chawaza

Every investment on planet earth has a price of purchase. This price can or may be seen as its capital value. An investor about to purchase an investment may want to know the maximum amount he can pay to purchase the investment. Now, Year’s Purchase is a capitalization factor and a multiplier which when applied to the Net Income it gives the capital value. It is occasionally known by different names depending on the subject country. In Nigeria, it is known by valuers as Year’s Purchase (Y.P). To determine the year’s purchase of an investment, the investment must produce an income (Net Income). Net Income is the actual income received from an investment after all expenses have been deducted. Expenses is known as expenditure or outgoings example: Salary, Wages, Service charge, Electricity bills, Utility bills, Tax, Etc

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[v1] 2019-12-29 09:22:42

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