Using the Following Information, Determine the Net Operating Income (NOI)

question 7

Multiple Choice

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. $$\begin{array} { | c | c | } \hline \text { Subject Prqperty } & \\\hline \text { Nurber of apartrments } & 15 \\\hline \text { Market Rent (permonth) } & 1000 \\\hline \text { Vacarcy ard Collecticn Losses } & 10 \% \text { of PGI } \\\hline \text { Operating Expenses } & 5 \% \text { of EGI } \\\hline \text { Capital Expenditures } & 10 \% \text { of EGI } \\\hline\end{array}$$

• A) $135,000
• B) $137,700
• C) $153,900
• D)$162,000

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Definitions:

Treasury Bond

A long-term, interest-bearing security issued by the U.S. government considered a low-risk investment.

Price-Earnings Ratio

A valuation metric comparing a company’s current share price to its per-share earnings, indicating the market's expectations of growth.

Earnings Per Share

A financial metric calculated by dividing the net earnings available to common shareholders by the average outstanding shares.

Closing Price

The final price at which a security is traded on a given trading day, often used for performance assessment.