Keliher and Mahoney (2000) created a DCF cash flow modeling tool to assist analysts when valuing
property using three distinctive approaches: deterministic point estimates, sensitivity analysis, and
probabilistic modeling. They intended to show how more advanced Monte Carlo simulation (MCS)
techniques could improve point estimate modeling and reveal risk when appraising real estate assets.
The authors compare and contrast single point estimates and subjective manual what-if analysis with
MCS-based analysis. They note that manually performing the permutations for each combination of
input parameters using what-if analysis was time consuming and impractical. They argued that
computing power was now inexpensive and the emergence of commercial simulation software, e.g.,