PROBLEMS 1. Craine Crossroads has 100 two-bedroom apartments that currently rent for $900 per month. The complex currently has five vacant units, matching the vacancy rate for two-bedroom units in the market area. Additional other income from recreation room fees and parking is $40,000 per year. Next year, two new apartment complexes will be completed in the market area, caus- ing the vacancy rates for the existing complexes to rise to 7.5 percent. Other income will remain flat and rent at Craine Crossroads will rise only 2 percent. Management fees are 5 percent of effective gross income. Property taxes are scheduled to go up to $140,000 from the current $130,000. Maintenance, repairs, and replacements are 8 percent of EGI. The other operating expenses are expected to cost 3 percent more next year. Those current expenses are as follows: Salaries Utilities Insurance Supplies Advertising, legal, misc. $95,200 $50,800 $19,100 $9,900 $14,700 Reconstruct this year's and next year's operating statements for Craine Crossroads. 2. Calculate the next year's operating statement for Craine Crossroads if the vacancy rate drops to 4 percent next year because of the transfer of troops to the army post nearby. All other projected figures will remain the same