Property Management
In Louisiana, which of the following represents a 'capital expenditure' versus a regular operating expense?
AReplacing a light bulb (capital) versus replacing the entire roof (operating)
BReplacing the entire HVAC system (capital) versus routine HVAC filter changes (operating)✓ Correct
CPaying property taxes (capital) versus collecting rent (operating)
DThe property manager's fee (capital) versus landscaping (operating)
Explanation
Capital expenditures are major investments in the property that extend its useful life or add value (roof replacement, HVAC system, parking lot repaving). Operating expenses are routine costs of maintaining the property (maintenance, utilities, insurance, management fees).
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