Real Estate Math
A Colorado commercial property has an annual NOI of $120,000. A comparable sold at a 7.5% cap rate. What is the indicated value of the subject property?
A$900,000
B$1,200,000
C$1,600,000✓ Correct
D$2,000,000
Explanation
Value = NOI / Cap Rate = $120,000 / 0.075 = $1,600,000.
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