Net operating income is needed to cover debt service

Assignment Help Financial Management

Reference no: EM131572174

Bug Bastion Village, a student apartment complex, generates effective gross income of $26,000. Income tax savings are $12,500 (due to interest and depreciation expense, the owner's income tax liability for the year is $12,500 less than it would have been without the investment). There are no capital transactions, and all operating expenses were tax deductible. The after-tax cash flow to the equity investor was $13,800, and operating expenses equaled 90 percent of net operating income. What percent of net operating income is needed to cover the debt service obligation? Present the property's operating statement in good form.

Reference no: EM131572174

Questions Cloud

Securities exchange act-north american free trade agreement : The Securities Exchange Act made provision for the establishment of exchanges the establishment of the North American Free Trade Agreement

Conflict typically appears when a group is in transition : State several forms of conflict you can expect in the types of groups you will lead. Consider group members suffering with substance use disorders.

Compare the arithmetic with the geometric mean : Compare the arithmetic with the geometric mean (average return). Define risk premium, and explain how it has varied during the past.

Certificate of deposit that pays compounded interest : Find the future value of a $195,000 Certificate of Deposit that pays compounded interest every three months at the rate of 8% per year.

Net operating income is needed to cover debt service : What percent of net operating income is needed to cover the debt service obligation?

Explain the purpose of financial statement : All sales are collected when the sale is made and all expenses are paid when the expense is incurred.

Would an incoming message be rejected as spam : Suppose that a Bayesian spam filter is trained on a set of 500 spam messages and 200 messages that are not spam. The word "exciting" appears in 40 spam message.

Why is the incidence of sickle-cell anemia excellent example : Why is the incidence of sickle-cell anemia an excellent example of a "balanced polymorphism," in which two or more alleles are maintained.

How would the coreys group have been different : What guidelines does this suggest to you for decisions about whether and when to use structured exercises in a group?

User Account

All Pages