Real Estate Math
A property has a monthly NOI of $5,000. At a 6% annual cap rate, what is the value?
A$600,000
B$1,000,000✓ Correct
C$500,000
D$750,000
Explanation
Annual NOI = $5,000 × 12 = $60,000. Value = NOI ÷ Cap Rate = $60,000 ÷ 0.06 = $1,000,000. To solve this, multiply the relevant values: $5,000 at 6%.. The correct answer is $1,000,000.. This is a common calculation on the Arizona real estate exam.
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