1. The net operating income for a property is $1 million. Interest expense is $100,000. Depreciation expense is $200,000. The mortgage payment is $150,000. The owner's marginal tax rate is 45%. What is the after-taxcash flow for the property?
A. 450,000
B. 535,000
C. 385,000
D. 650,000
2. The De Lapidated Arms Hotel has a gross potential rental income (at 100% occupancy) of $34,000,000 per year. Its operatingexpenses are $16,000,000 per year. The mortgage interest on the property is $13,000,000 per year and the depreciationexpense is $11,000,000 per year. Calculate the net operating income (NOI) of the property, assuming the hotel is 70% occupied
a. 10,400,000
b. 7,800,000
c. 10,400,000
d. 13,800,000