Certified Pennsylvania Evaluator Practice Exam

What type of items would typically fall under "capital improvements"?

1. Monthly utility bills

2. Repairs to existing structures

3. Additions or new pool installations

4. Management salaries

The correct answer is: Additions or new pool installations

Capital improvements refer to substantial enhancements made to a property that increase its overall value or extend its useful life. This can include construction projects, structural additions, or installations that significantly enhance the functionality or aesthetics of the property. In this context, the inclusion of additions or new pool installations fits perfectly because these types of projects not only improve the property but often require significant investment and result in increased property value. Such improvements are also considered capital assets, as they contribute to the property’s long-term functionality and marketability. Monthly utility bills are standard operating expenses and do not contribute directly to the property’s value. Repairs to existing structures, while certainly important for maintenance, generally fall under routine expenses rather than capital improvements unless they significantly extend the life or enhance the value of the property. Management salaries are operational costs associated with running a business or maintaining a property and do not contribute to capital improvements.