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You have just completed the appraisal of an office building and have concluded that the market...

You have just completed the appraisal of an office building and have concluded that the market value of the property is $2,500,000. You expect potential gross income (PGI) in the first year of operations to be $450,000; vacancy and collection losses to be 12 percent of PGI; operating expenses to be 30 percent of effective gross income (EGI); and capital expenditures to be 4 percent of EGI.

a. What is the EGI for the first year?

b. What is the NOI for the first year?

c. What is the implied going-in capitalization rate?

d. What is the effective gross income multiplier (EGIM)?

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