Does the building have a positive cash flow

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Reference no: EM131815140

Fred and Barney are looking for an investment. Near Prinstone University is a student housing building. It's physically rock solid (of course) but the stone-age friends aren't sure if it is a good investment. 

Here's the information that they were given (amounts in clams): 

Gross Income $10,000 

Income tax savings $1,000 (What the owners will save in annual income taxes.) 

After Tax Flow $2,100 

Operating expenses/ Net Operating Inc. 90% 

Does the building have a positive cash flow? Show your work by creating a "good form" cash flow statement. What is the debt service ratio for the property?

Reference no: EM131815140

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