Valuation of Varying Profit Rents – Part 1

Reconsiders the double sinking fund problem by looking at each of the common methods used. Investigates the underlying assumptions and the residual errors or inconsistencies. Notes that the use of traditional dual rate valuations results in a mathematical error within the valuation and an under‐valuation of the interest. Concludes that the Double Sinking Fund Method must be recommended in preference to Pannell′s Method.