MAI Practice Questions - MAI Appraisal Institute Designation Exam

Hoskold premise capitalization is most appropriately used when the income-producing asset:

Has a stable, perpetual income with low risk Is a wasting asset (e.g., mineral rights, timber, a quarry) where the safe sinking-fund rate is appropriate for capital recovery Has volatile income that grows at the discount rate Is fully leased on a long-term net lease to investment-grade tenants

Correct Answer:

Is a wasting asset (e.g., mineral rights, timber, a quarry) where the safe sinking-fund rate is appropriate for capital recovery

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