Property Valuation
Net operating income minus debt service equals:
AGross operating income
BBefore-tax cash flow✓ Correct
CNet spendable income after taxes
DEffective gross income
Explanation
Before-tax cash flow = NOI − Debt Service (mortgage principal and interest payments). It represents the cash available to the investor before income taxes.
Related Alabama Property Valuation Questions
- Functional obsolescence in property valuation refers to:
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