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Two buildings are located in the same area of comparable size, both under long-term leases....

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Finance

Two buildings are located in the same area of comparable size, both under long-term leases. One is leased to the government for a post office and the other for a hardware store. Using the income capitalization approach to appraise the properties, which of the following is correct?

a)

Proportional capitalization rates based on the different uses

b)

A lower capitalization rate for the hardware store

c)

The same capitalization rate for both

d)

A higher capitalization rate for the hardware store

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