Property Valuation
Net Operating Income (NOI) is calculated as:
APotential Gross Income minus vacancy and collection losses
BEffective Gross Income minus operating expenses (excluding debt service)✓ Correct
CEffective Gross Income minus mortgage payments
DPotential Gross Income minus all expenses including debt service
Explanation
NOI = Effective Gross Income (potential gross income minus vacancy and collection losses) minus all operating expenses, but before debt service (mortgage payments) and income taxes.
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