Property Valuation
An Arizona income property generates gross rents of $90,000 per year. Vacancy and credit losses are 5%, and operating expenses are $35,000. What is the Net Operating Income (NOI)?
A$50,500✓ Correct
B$49,000
C$55,000
D$40,500
Explanation
Effective Gross Income = $90,000 − (5% × $90,000) = $90,000 − $4,500 = $85,500. NOI = EGI − Operating Expenses = $85,500 − $35,000 = $50,500.
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