Question: You are considering purchasing an office building for $2,500,000. You expect the potential gross income (PGI) in the first year of operations to be $450,000;

You are considering purchasing an office building for $2,500,000. You expect the potential gross income (PGI) in the first year of operations to be $450,000; vacancy and col lection losses to be 9 percent of PGI; and operating expenses and capital expenditures (combined) to be 42 percent of effective gross income (EGI). What is the estimated net operating income? What is the implied first-year overall capialization rate? What is the effective gross income multiplier?

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How accurate is this information (compared to information in Step 2)?

How influential does this public see itself as being within the organization?

How does or how might the key public affect your organization?