Real Estate Math
A property has an annual net operating income of $72,000. The capitalization rate is 8%. What is the estimated property value?
A$576,000
B$900,000✓ Correct
C$720,000
D$648,000
Explanation
Value = NOI ÷ Cap Rate = $72,000 ÷ 0.08 = $900,000.
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