Property Valuation
A Missouri appraiser values a property using the income approach. The property has gross rental income of $48,000/year, vacancy and collection losses of 5%, and operating expenses of $18,000. What is the NOI?
A$27,600✓ Correct
B$30,000
C$45,600
D$27,000
Explanation
Effective gross income = $48,000 × (1 − 5%) = $48,000 × 0.95 = $45,600. NOI = EGI − Operating expenses = $45,600 − $18,000 = $27,600.
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