Finance
A South Carolina property has an annual NOI of $36,000. The property is financed with a $300,000 mortgage at 6% interest (annual debt service = $21,600). What is the annual cash flow before tax?
A$14,400✓ Correct
B$21,600
C$36,000
D$57,600
Explanation
Cash flow before tax = NOI − Annual Debt Service = $36,000 − $21,600 = $14,400. To solve this, multiply the relevant values: $36,000 and $300,000 at 6%.. The correct answer is $14,400.. This is a common calculation on the South Carolina real estate exam.
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