A property is offered for $650,000, $409,000 of which is financed through a first mortgage note. The following data reflect the expected first-year operating results:

Potential gross rent $150,000

Less: Vacancy and uncollectible rent8,000

Effective gross income $142,000

Less: Operating expenses80,000

Net operating income $62,000

Less: Debt service50,000

Before-tax cash flow $12,000

Plus: Principal paid 1,600

Less: Cost recovery allowance18,000

Taxable income (loss) ($5,000)

Times: Marginal income tax rate (federal and state).40

Income tax (tax savings) ($2,000)

Before-tax cash flow $12,000

Plus: Tax savings2,000

After-tax cash flow $14,000

Required: Based on the above forecast, compute:

I. The potential gross income multiplier;

II. The operating ratio;

III. The debt coverage ratio;

IV. The overall capitalization rate;

V. The cash-on-cash rate of return.