Property Valuation
What is the indicated value of a property with an annual NOI of $36,000 and a capitalization rate of 7.5%?
A$270,000
B$480,000✓ Correct
C$360,000
D$540,000
Explanation
Value = NOI ÷ Cap Rate = $36,000 ÷ 0.075 = $480,000. To solve this, multiply the relevant values: $36,000 at 7.5%.. The correct answer is $480,000.. This is a common calculation on the Alabama real estate exam.
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