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However, this is anticipated to change given that the hotel appreciates in worth, For the reason that administration rate represents The existing worth of the home. Thus, the once-a-year cost will even be increased in comparison to the management rate.

Consequently, in the event you needed to subtract out all of the depreciation to get your net book worth, you may learn that your real estate property valuation is noticeably lessen than that of the Marriott Hotel.

The NPV, on the other hand, doesn't bear in mind the depreciation since it is the price of money. Nonetheless, this is a component on the prolonged-time period management cost, which also incorporates the maintenance rate as well as the depreciation component.

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