Property Valuation
In the income approach, a property generates $36,000 annual net operating income (NOI). If the capitalization rate is 6%, what is the estimated value?
A$216,000
B$600,000✓ Correct
C$360,000
D$540,000
Explanation
Value = NOI ÷ Cap rate = $36,000 ÷ 0.06 = $600,000.
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