one warehouse, 2 office buildings: which one depreciates more? and what is the capitalization method?
there was also a hotel too… it was between the hotel and warehouse - warehouse looked like too much of an obvious answer so not sure.
should be warehouse, G is negtive.
Yes, g was negative for warehouse.
From left to right, do you recall which one was the warehouse in that table?
I believe it was C. It was the only one with the capitalization rate ABOVE the discount rate or something like that. One of these kids is doing his own thing…
caspian Wrote: ------------------------------------------------------- > I believe it was C. It was the only one with the > capitalization rate ABOVE the discount rate or > something like that. > > One of these kids is doing his own thing… Exactly… For the people above, it didn’t have anything to do with trying to think “conceptually” as to which one would depreciate. It was in the math of the Cap rate. The Warehouse © had a CAP rate that was higher than the discount rate, which meant G was negative. It was the only one where that was the case.
I also went for #3 for that reason.
Hotel ofcourse! choice D. Warehouse don’t depreciate, given there is minimum constructed area, so typically it represent the land value. Both the apartment blocks were in highly desired area.
I was thinking along the same lines as iyounus with my choice of the hotel.