Real Estate Math
An Alaska property generates annual gross rents of $72,000. The vacancy rate is 5% and operating expenses equal 40% of effective gross income. What is the NOI?
A$31,200
B$40,320
C$41,040✓ Correct
D$43,200
Explanation
EGI = $72,000 × (1 − 0.05) = $72,000 × 0.95 = $68,400. Operating expenses = $68,400 × 40% = $27,360. NOI = $68,400 − $27,360 = $41,040.
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