Given the following information, calculate the net operating income assuming below-line treatment of capital expenditures: property: 4 office units, contract rents per unit: $2,500 per month; vacancy and collection losses: 15%; operating expenses: $42,000; capital expenditures: 10%.

$60,000

Explanation:

Property is 4 units

OE= 42,000 (of EGI)

Contract rents is 2500 per month

VC=15%

PGI=4*2500*12=120,000

120,000 -VC 18,000

EGI= 102,000

102,000 - OE 42,000

NOI= $60,000

Net operating income is $60,000

Explanation:

Numbers of Property = 4 units

Operating Expenses = $42,00)

Contract rents = $2500 / month

Vacancy and collection losses = 15%

Property Gross Rent = Number of Units x Contract rent per unit x No, of Months = 4 units x $2500 x 12 months = $120,000

Property Net Rent = Property Gross Rent - Vacancy and collection losses = $120,000 - ( $120,000 x 15% ) = $120,000 - $18,000 = $102,000

Property operating Income = Property Net Rent - Operating Expenses = 102,000 - 42,000  = $60,000

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.