Scenario #2

The questions in this case study depend on the following data:

The subject property is a small apartment complex.  Pertinent data are listed below:

The Potential Gross Income is $350,000.  Vacancy and collection losses are 6% of PGI per month.  Other Income is $12,000 per year

1) What is the PGI?

* A. $350,000

B. $340,000

C. $360,000

D. $325,000

2) What is the EGI?

A. $353,000

B. $350,000

* C. $341,000

D. $329,000

3) What is the NOI?

A. $208,500

* B. $204,600

C. $192,600

D. $206,400

4) Assuming a cap rate of 12%, what is the value of the property to the nearest thousand dollars?

A. $1,761,000

* B. $1,705,000

C. $1,768,000

D. $1,768,000

5) What is the Potential Gross Income Multiplier (use the sale price)?

A. 6.4

* B. 3.7

C. 3.8

D. 44.6

6) What is the Gross Rent Multiplier (use the sale price)?

A. 3.7

B. 6.4

C. 3.8

* D. 44.6

7) What is the Effective Gross Income Multiplier (use the sale price)?

A. 44.6

B. 6.4

C. 3.7

* D. 3.8

8) What is the Net Operating Income Multiplier (use the sale price)?

A. 3.8

* B. 6.4

C. 44.6

D. 3.7

9) What is the Annual Debt Service?

* A. $135,589

B. $136,684

C. $137,418

D. $133,718

10) What is the Mortgage Constant?

A. 0.134299

B. 0.136059

C. 0.144017

* D. 0.139065

11) What is the Equity Dividend? (CG?)

A. $61,419

* B. $69,011

C. $62,870

D. $64,216

12) What is the Equity Dividend Rate? (CG)

A. 23.50%

* B. 21.23%

C. 22.75%

D. 23.01%

13) What is the Cap Rate using the Band of Investment Method? (CG)

* A. 15.74%

B. 16.12%

C. 16.75%

D. 15.83%

14) What is the Debt Coverage Ratio? (CG?)

* A. 1.51

B. 1.37

C. 1.40

D. 1.45

15) What is the Net Income Ratio? (CG)

A. 0.50

* B. 0.60

C. 0.75

D. 0.55

16) What is the Operating Expense Ratio? (CG)

A. 0.45

B. 0.51

* C. 0.40

D. 0.48