Real Estate Math
A New York property has a gross potential income of $120,000, a vacancy and collection loss of 6%, and operating expenses of $42,000. What is the Net Operating Income?
A$68,800
B$70,800✓ Correct
C$78,000
D$112,800
Explanation
Effective Gross Income = $120,000 x (1 - 0.06) = $120,000 x 0.94 = $112,800. NOI = EGI - Operating Expenses = $112,800 - $42,000 = $70,800.
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