1. Based on the following data, estimate net operating income. Show your work in good form.

Two-bedroom units rent for $600 per month (total of 40 units)

One-bedroom units rent for $450 per month (total of 20 units)

Vacancy and uncollectible rent losses typically amount to six percent of potential gross rent.

Operating expenses average approximately 45 percent of potential gross income.

2. Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number. Risk-adjusted WACC 10.0% Net investment cost (depreciable basis) $65,000 Straight-line depr. rate 33.3333% Sales revenues, each year $71,000 Annual operating costs (excl. depr.) $25,000 Tax rate 35.0%

a. $23,136

b. $28,215

c. $25,393

d. $30,190

e. $25,958