What term describes the method where future income estimates are calculated and a discount rate is applied?

The term that accurately describes the method where future income estimates are calculated and a discount rate is applied is known as "Net Present Value." This concept involves determining the present worth of future cash flows by discounting them back to their value in today's dollars using a specified discount rate. By applying this method, appraisers and investors can assess the profitability and feasibility of an investment or project by understanding how much future earnings are worth in the present context.

While "Yield" refers to the income generated from an investment relative to its cost or value, it does not specifically involve the calculation and application of a discount rate to future income estimates. Similarly, the "Capitalization Rate" is related to the valuation of income-producing properties, serving as a rate of return on an investment, but again, it does not directly pertain to the discounting of future income. "Cash Flow Analysis" focuses on the inflow and outflow of cash within a given period but does not intrinsically involve the discounted value aspect that defines Net Present Value. These nuances highlight why the correct answer aligns specifically with the concept of Net Present Value.