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However, the report notes that "there are only three or four that have a current market value. Proposition 8 provides that the property owner is entitled to the lower of two values - either the Proposition 13 value, which is the purchase price and cost of new construction with inflation not to exceed 2 percent a year, or the current market value of the property. Given its origin, and the constraints arising from reliability,, we believe the only useful financial accounting application of present value is for estimating a current market value that cannot be observed by any other method. |
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