An Investor Calculates an Incremental Return of Renovating a Building

question 35

True/False

An investor calculates an incremental return of renovating a building of 14%.Other properties provide a 12.5% overall rate of return to equity investors.Therefore,the property is a good investment.

---

Definitions:

Indirect Advertising Costs

Expenses related to advertising that are not directly associated with a specific advertising medium or campaign, such as salaries of marketing staff or overhead costs.

Allocated

The process of apportioning resources, costs, or expenses to specific projects, departments, or cost centers.

Gross Sales

The total sales revenue of a business before any deductions are made for returns, allowances, and discounts.

Building Cost

The total expenses incurred to acquire, construct, or improve a building, including material, labor, and other costs.