Property Valuation
An Alaska property generates annual gross rental income of $36,000. The vacancy and collection loss is estimated at 5%, and operating expenses are $12,000. What is the net operating income (NOI)?
A$22,200✓ Correct
B$24,000
C$24,800
D$26,200
Explanation
NOI = Gross Income − Vacancy Loss − Operating Expenses. Gross income = $36,000. Vacancy loss = $36,000 × 5% = $1,800. Effective gross income = $34,200. NOI = $34,200 − $12,000 = $22,200.
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