What aspect does Yield Capitalization specifically assess regarding future cash flows?

Yield Capitalization specifically focuses on the Present Value of future cash flows generated by an investment property. This method is used by appraisers to estimate the value of income-producing properties by forecasting the cash flows that are expected to be generated over a certain period. It then discounts these future cash flows back to their present value using an appropriate discount rate.

Present Value is crucial in investment analysis because it allows appraisers to determine how much future cash flows are worth in today's dollars, taking into account the time value of money. This means that cash flows expected to be received in the future must be adjusted to reflect their value today, which provides a more accurate representation of the property’s value based on its ability to generate income.

The other options, while related to the overall context of real estate appraisal, do not directly address the specific assessment made by Yield Capitalization regarding future cash flows. Market trends influence property values generally, the net discount rate is a component used in calculating present value but does not specifically assess cash flows, and inflation rate impacts the purchasing power and might be considered in broader financial considerations but is not the primary focus of Yield Capitalization itself.