Final answer:
The income approach, used by appraisers, makes use of capitalization, with consideration of depreciation and appreciation.
Step-by-step explanation:
The income approach, used by appraisers in the field of business, makes use of capitalization. The income approach is one of the three commonly used approaches to appraise the value of an income-generating property, with the other two being the market approach and the cost approach. Capitalization, in this context, refers to the process of estimating the present value of an asset's future income by applying a market-derived capitalization rate to the expected income stream.
Depreciation and appreciation are also factors that may be considered within the income approach. Depreciation refers to the decrease in the value of an asset over time, while appreciation refers to the increase in value.