Question

Using the following information, determine the net operating income (NOI) for the first year of operations of the subject property using "above-line" treatment of capital expenditures. Number of units:30 Market rent per unit per month: $1,000 Miscelaneous Income per year: $5,000 V&C Loss: 10% of PGI Operating Expenses: 20% of EGI CAPX: 10% of EGI $229.000 $245,800 5230.300 $302.500

Answer 1

given number of units = 30

rent per unit per month = 1000

Annual Total PGI = 12 *30 * 1000 = 360000

Loss = 360,000 * 10% = 36,000

EGI = PGI - Loss + Miscellaneous income

= 360,000 - 36,000 + 5000

= 329,000

Opearting expenses = 329,000 * 20% = 65,800

CAPX = 329,000 * 10% = 32,900

Net Operating income= EGI - Operating expenses - CAPX

Net operating Income = 329,000 - 65,800 - 32,900

= $230,300

Third Option is correct

(please give a thumbs up if it's helpful.thank you)