Property Valuation
In the income approach, if an Arizona property has an NOI of $72,000 and sold for $900,000, what is the overall capitalization rate?
A8%✓ Correct
B7%
C9%
D10%
Explanation
Cap Rate = NOI ÷ Sale Price = $72,000 ÷ $900,000 = 0.08 = 8%.
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