Real Estate Math
If a property's cap rate is 9% and the NOI is $54,000, what is the value? If NOI increases to $60,000, what is the new value?
A$666,667✓ Correct
B$540,000 / $600,000
C$486,000 / $540,000
D$594,000 / $660,000
Explanation
At $54,000: $54,000 ÷ 0.09 = $600,000. At $60,000: $60,000 ÷ 0.09 = $666,667. To solve this, multiply the relevant values: $54,000, and $60,000, at 9%.. The correct answer is $666,667.. This is a common calculation on the Alabama real estate exam.
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