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Principle of Surplus Productivity (Principe de proportion)

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Term Definition
Principle of Surplus Productivity (Principe de proportion)
In the appraisal of Real Estate the principle of Surplus Productivity states that if the expenses of ownership (capital, labor and management) are deducted from net income, the remaining amount is termed surplus productivity and is considered the investor's return on the use of the land, or land rent. The expectation of profit is also expressed as the entrepreneurial incentive that motivates a developer to assume the risks involved with taking on a project.
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