Real Estate Math
A building has a gross annual income of $120,000 and a vacancy/collection loss of 5%. Net operating expenses are $40,000. What is the NOI?
A$74,000✓ Correct
B$80,000
C$114,000
D$86,000
Explanation
Effective Gross Income = $120,000 × (1 − 0.05) = $114,000. NOI = EGI − Operating Expenses = $114,000 − $40,000 = $74,000.
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