d. (a) and (e) above 40. Effective interest rates are a increased by the charging of discount points b. decreased by the charging of discount points e. unaffected by the charging of discount points. may be increase or dcreased bay depending upon whether the points are d. currently deductible for income tax purposes. Problem Questions (S points each, total 30 points) 41. Construct the effective gross income for Riverside Apartments which has 200 one-bedroom apartments of 800 the nearby neighborhood. Show your work in good form. square feet each. You as the property manager find three similar properties in . A has 500 units, all one bedroom, each with 850 square feet, renting for $800. There are - B has 150 units, all one bedroom, each with 750 square feet, renting for $700. There are . C has 300 units, all one bedroom, each with 650 square feet, renting for $600. There are 50 vacant units. 10 vacant units. 20 vacant units. Your property collects washer/dryer rental income $85,000 every year. 42. A property that has a market value of $1.2 million is expected to generate annual net operating income of S150.000. You are considering three options of financing: 1) No loan 2) A loan at 90% loan to value ratio that will be repaid in equal monthly installments over 25 3) A loan at 80% loan to value ratio that will be repaid in equal monthly installments over 20 Please calculate the following for each of the three financing options and recommend the best years, with interest at 7% per annum. years, with interest at 5% per annum. option. .Net operating income Annual debt service . Before-tax cash flow . Purchase price Loan amount Equity invested Return on assets Current yield