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EXERCISE 14.1 Review exercise

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To review Chapter 13, “Real Estate Appraisal,” read the fact pattern and answer the following questions.

Fact Pattern: a ten-unit apartment building has five units that lease for $1,000 per month, and five units that lease for $1,500 per month. Unpaid debts and vacancies are 5% of potential gross income. Operating expenses for the building are $100,000 per year. Annual debt service is $24,000 per year.