Property Valuation
In the income approach to value, the 'effective gross income' (EGI) is calculated as:
AGross potential income minus operating expenses
BGross potential income minus vacancy and credit losses✓ Correct
CNet operating income plus debt service
DGross rent plus all other income
Explanation
Effective Gross Income = Gross Potential Income (at 100% occupancy) − Vacancy & Credit Losses. It represents the realistic income before operating expenses.
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