Real Estate Math
A commercial property has an annual NOI of $105,600 and comparable properties are selling at a 7% cap rate. What is the property's value using the income approach?
A$739,200
B$1,508,571✓ Correct
C$1,200,000
D$7,392,000
Explanation
Value = NOI ÷ Cap Rate = $105,600 ÷ 0.07 = $1,508,571 (rounded to the nearest dollar).
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