Use the following to answer the next 5 questions:

Potential gross income= $10,000

Operating expenses = $3,000

Vacancies and collection losses = 5% of PGI

Debt service = $3,000.

No other expenses are involved.

1. Based on the information provided above, what is the effective gross income? a. $10,000 b. $9,500 c. $7,000 d. $6,500 e. $3,500

2. What is the NOI? a. $9,500 b. $7,000 c. $3,500 d. $4,000 e. $6,500

3. What is the before-tax cash flow? a. $7,000 b. $6,500 c. $4,000 d. $3,500 e. $2,500

4. What is the debt service coverage ratio? a. 1.17 b. 1.33 c. 2.17 d. 2.33 e. 3.17

5. What is the break-even ratio? a. 0.86 b. 1.71 c. 0.60 d. 0.92 e. 0.63