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)3.3

Question

Quizplus · Accepted Answer

Effective Gross Income (EGI) = Potential Gross Income - Vacancy and Collection Losses + Miscellaneous Income
EGI = $250,000 - ($250,000 x 15%) + $50,000
EGI = $250,000 - $37,500 + $50,000
EGI = $262,500

Effective Gross Income Multiplier (EGIM) = Sale Price / EGI
EGIM = $950,000 / $262,500
EGIM = 3.62

Therefore, the closest option to the calculated value is C) 2.8.

Given the Following Information,calculate the Effective Gross Income Multiplier