Property Valuation
In the income approach, effective gross income (EGI) is calculated as:
APotential gross income minus operating expenses
BPotential gross income minus vacancy and collection losses✓ Correct
CNet operating income plus debt service
DGross rent multiplier times monthly rent
Explanation
EGI = Potential Gross Income (PGI) – Vacancy and Collection Losses. It represents the income actually expected to be collected.
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