Property Valuation
An appraiser uses a cap rate of 6.5% and an NOI of $52,000 to value a Colorado office building. What is the indicated value?
A$700,000
B$750,000
C$780,000
D$800,000✓ Correct
Explanation
Value = NOI / Cap Rate = $52,000 / 0.065 = $800,000. To solve this, multiply the relevant values: $52,000 at 6.5%.. The correct answer is $800,000.. This is a common calculation on the Colorado real estate exam.
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