Ms. Moore owns a 16-unit apartment complex. The market rent…

Ms. Moore owns a 16-unit apartment complex. The market rent on each unit is $500 per month. It is expected that, on average, two of the units will be vacant for six months each year and an additional $250 per year will be lost due to uncollected rent. The annual operating expenses are estimated to be 39 percent of EGI. Capital expenditures for items such as carpeting, appliances, roofing and resurfacing the parking area are estimated to be $3,400 annually. What is the expected annual net operating income of the property? Assume an above-line treatment of capital expenditures.