Question

An analyst is evaluating an investment in an apartment complex based on the following annual data:

	Apartment A (in USD)	Apartment B (in USD)	Apartment C (in USD)
Gross Potential Rental Income	2,150,000	1,200,000	1,800,000
Operating Expenses	1,600,000	760,000	1,240,000
Depreciation	350,000	350,000	350,000
Estimated Vacancy and Collection Expenses	2%	3%	0%
Net Operating Income	?	?	?
Cap Rate	12%	10%	14%

The apartment complex that would have the greatest value based on the income approach is:

Group of answer choices

Apartment A

Apartment B

Apartment C

Answer 1