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.