Nev. Admin. Code § 361.268 — 361.268

NAC 361.268    “Discount rate” defined. ( NRS
360.090 , 361.320 )    “Discount rate” means the
annual percentage rate used to select present worth factors. The discount rate
is one form of capitalization rate. A discount rate can be derived in two ways:
1.  By use of the band-of-investment method;
or
2.  From sales data using the discounted cash
flow rate of return method.
Ê The discounted
cash flow rate of return method consists of finding the annual rate at which
future income must be discounted so that the total present worth equals the
proposed investment in the sale price of a property. The present worth of a
given year’s income automatically provides for recapture of capital. The
difference between the income itself and its present worth provides for the
return (yield) on the capital. The term “discount factor” is sometimes
erroneously used instead of “discount rate.” Actually, the factors used in
discounting are present worth factors.
[Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]