Property Valuation
A property generates a net operating income of $48,000. If the market capitalization rate is 6%, what is the estimated value?
A$288,000
B$480,000
C$800,000✓ Correct
D$2,880,000
Explanation
Value = NOI ÷ Cap Rate = $48,000 ÷ 0.06 = $800,000. To solve this, multiply the relevant values: $48,000 at 6%.. The correct answer is $800,000.. This is a common calculation on the Connecticut real estate exam.
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