The expected costs to make replacements, alterations, or improvements to a building that materially prolong its life and increase its value is referred to as:
A) operating expenses
B) capital expenditures
C) vacancy losses
D) collection losses

Question

Quizplus · Accepted Answer

Capital expenditures are expected costs to make improvements to a building that increase its value and prolong its life. Operating expenses are ongoing expenses necessary to operate the building, vacancy losses refer to revenue lost due to unoccupied units, and collection losses refer to revenue lost due to unpaid rent or debt.

The Expected Costs to Make Replacements, Alterations, or Improvements to a Building