Which definition refers to the annual return required by an investor for recovering a wasting asset?

The definition that corresponds to the annual return required by an investor for recovering a wasting asset is known as the recapture rate. This rate is specifically concerned with the recovery of the initial investment in an asset that depreciates over time, such as a piece of real estate or equipment. The recapture rate ensures that the investor can recover the value lost due to depreciation and acts as a benchmark for evaluating the necessary return on investment in relation to the asset's diminishing value.

In real estate and investment contexts, understanding the recapture rate is essential when assessing the performance of investments that have a limited useful life. This is different from the equity yield rate, which typically relates to returns on equity investments rather than the recovery of declining asset value. The discount rate focuses more on the present value of future cash flows, while the overall rate generally pertains to the comprehensive rate of return on an investment, encompassing both income and appreciation but not specifically addressing the recovery of depreciation or wasting assets.

Recognizing the specific focus of the recapture rate clarifies its importance for investors seeking to understand their required returns in relation to the diminishing value of their assets.