Determine the annual Net Operating Income (NOI) and the cash flow before taxes using the assumptions and facts for the following real estate investment:

a) 40 Units

b) Rent per unit is $1,500 per month

c) Vacancy and debt losses are 5% of gross potential income

d) Operating Expenses are $426,000 per year

e) Debt service is 106,000, which includes $90,000 in interest

f) Depreciation expense is $46,000 per annum.

1. Using the information from question #2, determine the Taxable Income or Loss.

2. Using the information from questions 2 & 3, determine the after-tax cash flow, assuming a tax rate of 42%.