The NOI is $1,000,000, the debt service is $800,000 of which $700,000 is interest, the depreciation expense is $250,000. What is the Before-tax Cash Flow to the equity investor EBTCF) if there are no capital improvement expenditures or reversion items this period?
A) $50,000
B) $182,500
C) $200,000
D) $300,000
E) $750,000

Question

Quizplus · Accepted Answer

Before-tax Cash Flow (BTCF) to the equity investor is calculated as Net Operating Income (NOI) minus debt service. Here, NOI is $1,000,000 and debt service is $800,000. Therefore, BTCF = $1,000,000 - $800,000 = $200,000.

The NOI Is $1,000,000, the Debt Service Is $800,000 of Which