Use the table below to estimate the annual Net Operating Income $($NOI$)$ for

the first and second year of a building with $12$ apartments that are currently

rented for $$1,375/$ month each given the following assumptions:

Capital Expenditures $($CAPX$)$ equal to $12\%$ of Effective Gross Income $($EGI$)$

Potential Gross Income $($PGI$)$ increases at $4\%$ per year

Anticipated Vacancy and Collection Losses of $10\%$ of PGI

Operating Expenses $($OE$)$ equal to $$15,440$ and $$17,110$ during $1^{st}$ and $2^{nd}$

year