Real Estate Math
A property's NOI is $50,000. If the cap rate decreases from 8% to 7%, how does the estimated property value change?
AIncreases from $625,000 to $714,286✓ Correct
BDecreases from $625,000 to $500,000
CRemains the same
DIncreases from $400,000 to $500,000
Explanation
At 8%: $50,000 ÷ 0.08 = $625,000.
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