Because Accounting Depreciation Charges Often Exceed the True Economic Depreciation

question 24

True/False

Because accounting depreciation charges often exceed the true economic depreciation of real estate,the earnings of companies owning real estate typically understate the level of operating cash flow.

---

Definitions:

Thoracentesis

A medical procedure used to drain fluid or air from the pleural space around the lungs.

Fluid

A substance that has no fixed shape and yields easily to external pressure; can be a gas or a liquid.

Pleura

The thin membrane that envelops the lungs and lines the inner surface of the chest wall, performing a crucial role in respiratory movement and protection.

Acute Epiglottitis

A serious, life-threatening condition characterized by inflammation of the epiglottis, the flap at the base of the tongue that keeps food from going into the trachea during swallowing.