Use the following information to answer questions

• You are considering purchasing a small office building for $1,855,000

• Your expectations include:

First-year gross potential income of $350,000;

Vacancy & collection losses equal to 8% of PGI;

Operating expenses = 35% of EGI;

Capital expenditures = 4% of EGI

$1,390,200 mortgage @ 6%

Mortgage will be amortized over 30 years

Total up-front financing costs = 3% of the loan amount

Calculate Going-in Cap Rate (Ro):

Question 16 options:

	8.54%
	9.34%
	7.50%
	10.59%

Calculate the Net Income Multiplier (NIM):

	9.44
	10.71
	11.71
	10.67

Calculate the Equity Dividend Ratio (EDR):

Question 18 options:

11.32%

19.03%

12.89%

10.95%

Calculate the Debt yield ratio (DYR):

	12.55%
	13.86%
	10.73%
	14.13%