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Use the information below to answer the following 3 questions (i.e., questions 38 - 40) O You are considering purchasing a small office building for

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Use the information below to answer the following 3 questions (i.e., questions 38 - 40) O You are considering purchasing a small office building for $1,900,000 Your expectations include: - First-year gross potential income of $350,000: Vacancy & collection losses equal to 7% of PGI; . Operating expenses = 38% of EGI: Capital expenditures = 5% of EGI; o $1.490,200 mortgage @ 6.5%: Mortgage will be amortized over 30 years: Total up-front financing costs = 1% of the loan amount; Question 38 (2.5 points) The Equity Dividend Ratio (EDR) is: 17.1% 15.3% 12.0% 10.3% Avdia L The Debt Coverage Ratio is: 0.9 1.4 2.1 1.6 Question 40 (2.5 points) The Debt Yield Ratio is: 10.9% 12.5% 12.1% 13.4%

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