Question

Which of the following would not be considered an operating expense?

Question 10 options:

1)	hiring someone to repair a toilet

2)	building a guard station for the parking garage

3)	property taxes

4)	garbage removal

Using the sales comparison or market data approach, if the subject property is $500 inferior to the comparable sale #1 due to its location, and $200 superior to comparable #1 due to lot size, what is the indicated value of the subject property if the comparable sold for $75,000?

Question 17 options:

1)

$74,700

2)

$74,800

3)

$75,200

4)

$75,300

5)	None of the above

Answer 1

Answer 10

Option (2) : building a guard station for the parking garage.

Explanation:

The operating expenses are those expenditures that are relevant for the day-to-day workings to carry out the operation. These are revenue expenses in nature. Hence, here all the expenses except option (2) are operating expenses.

However, the expense mention in option (2) is a capital expenditure as it is bringing modifications to the balance sheet. It is capital spending towards creation of a capital asset.