Real Estate Math
A commercial property in Alaska is offered for sale at an 8.5% cap rate. The NOI is $68,000. What is the asking price?
A$578,000
B$700,000
C$800,000✓ Correct
D$952,000
Explanation
Price = NOI ÷ Cap rate. $68,000 ÷ 0.085 = $800,000. To solve this, multiply the relevant values: $68,000 at 8.5%.. The correct answer is $800,000.. This is a common calculation on the Alaska real estate exam.
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