Real Estate Math
A Vermont property has a potential gross income (PGI) of $120,000, a 5% vacancy rate, and $35,000 in annual operating expenses. What is the net operating income (NOI)?
A$79,000✓ Correct
B$67,150
C$85,000
D$114,000
Explanation
EGI = PGI × (1 − vacancy rate) = $120,000 × 0.95 = $114,000. NOI = EGI − Operating Expenses = $114,000 − $35,000 = $79,000.
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