Property Valuation
In a Mississippi appraisal using the income approach, 'potential gross income' (PGI) differs from 'effective gross income' (EGI) in that:
APGI includes vacancy losses while EGI does not
BPGI is 100% occupancy income; EGI subtracts vacancy and credit losses from PGI✓ Correct
CPGI is always higher than market rent
DEGI includes capital expenditures
Explanation
Potential Gross Income (PGI) is the income the property would generate at 100% occupancy at market rents. Effective Gross Income (EGI) is PGI minus an allowance for vacancy and collection losses, representing the income actually expected to be collected. EGI is always less than or equal to PGI.
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