What are the four basic components of NOI?
Ans: 1 - Potential rental income (PRI)
2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.)
Ans: Lease analysis
PRI equals NOI in what property/tenant scenario?...
CCIM 101 Financial Analysis Questions
and Correct Answers
What are the four basic components of NOI?
Ans: 1 - Potential rental income (PRI)
2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.)
Ans: Lease analysis
PRI equals NOI in what property/tenant scenario?
Ans: If the property has one tenant with a long-term absolute NNN lease.
[XXXX] is PRI minus vacancy and collection losses.
, Ans: ERI (Effective Rental Income)
Name some items which are EXCLUDED from Operating Expenses.
Ans: Interest and principal on debt on the property
Depreciation (cost recovery)
Capital Expenditures
Income Taxes
Reserves for Replacement
Tenant Improvements
True or False: Depreciation is included in Operating Expenses.
Ans: False
True of False: Principal and interest on debt financing is included in Operating
Expenses
Ans: False. This is an expense of ownership, not an operating expense.
True or False: Capital Expenditures are included in Operating Expenses.
Ans: False. They are written off over a period of years.
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