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Not unless the factory that has been is sold and produces cash flow (i.e. proceeds from an asset sale), whether negative or positive. The increase in market value of the property is beneficial to the firm, however, unless the asset is monetized (through a sale or some other disposition) it is only a paper gain. Hence the non-effect on cash flow, thus no effect on the DCF.
Does that help?
Also, book value merely represents the cost paid for the real property. Thus, the increase in market value is only a paper gain, unless sold and that increase in market value is realized. However, the increase in market value may be beneficial in that the company use it as collateral to obtain financing. If so, the property would be appraised at its current market value to determine the loan amount the property would support (i.e. based on loan to value ratios and other lending metrics).
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I could go on if needed....
The cost of land will not have direct impact in DCF, however if one is using DCF for valuing the firm, then cost of land (as a non-operating asset) will be added to the NPV.
The land on which a factory sits is not a non-operating asset and cannot be added on to a DC. Here is my suggestion. Do a traditional DCF, where the value of land is irrelevant. Then value the factory for liquidation, with the current value of land. The higher of the two values will be the one you attach to the asset.