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mel-nik [20]
3 years ago
6

Given the following information, calculate the effective gross income multiplier: sale price: $950,000; potential gross income:

$250,000; vacancy and collection losses: 15%; and miscellaneous income: $50,000.
A. 0.36
B. 0.30
C. 2.8
D. 3.6
Business
1 answer:
Paul [167]3 years ago
6 0

Answer:

D. 3.6

Explanation:

The effective gross income multiplier (EGIM) is the ratio between the sale price (SP) and the effective growth income (EGI)

EGIM = \frac{SP}{EGI}

Sales Price (SP) = $950,000

Potential gross income (PI) = $250,000

Vacancy and collection losses (VC)= 15% = 0.15 * $250,000 = $37,500

Miscellaneous income (M) =  $50,000.

The effective growth income is given by:

EGI = PI +M - VC = \$250,000 +\$50,000 - \$37,500\\EGI = \$262,500

Thus, the effective gross income multiplier is:

EGIM = \frac{\$950,000}{\$262,500} \\EGIM = 3.6

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Read more about call exercises

brainly.com/question/14763313

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