Which of the following is true about due diligence regarding the physical plant?

The assertion that the condition of each aspect of the physical plant is analyzed is true concerning due diligence. During the due diligence process, a comprehensive inspection of the physical plant is conducted to assess the condition and functionality of various components, such as structural integrity, systems (electrical, plumbing, HVAC), and any potential environmental concerns. This thorough analysis helps stakeholders identify any issues that may need addressing and informs decisions regarding maintenance, repairs, or upgrades.

This process is essential because it provides valuable insights that can significantly impact the overall valuation of the property. By carefully examining each aspect, potential buyers or investors can better understand what maintenance or capital expenditures may be required in the future.

The other options reflect misunderstandings of what due diligence entails. For instance, due diligence typically involves estimating the costs related to repairs or replacements, negotiating purchase prices based on findings, and reviewing all components, including HVAC systems, rather than excluding any significant part of the physical plant.