Using the following information, compute net operating income ( NOI ) for the first year of operations. Use an above-line treatment of capital expenditures.

• Number of apartments: 10
• Rent per month per apartment: $800
• Expected vacancy and collection loss: 5 percent
• Annual maintenance: $12,000
• Annual depreciation: $6,000
• Property taxes: $4,000
• Property insurance: $5,000
• Management: $6,000
• Capital expenditures: $5,000
• Income taxes: $9,000
• Other operating expenses: $3,000
• Annual mortgage debt payments: $14,000

a)

$27,200

b)

$41,200

c)

$47,200

d)

$50,200

e)

$56,200