Real Estate Math
A Delaware commercial property has an NOI of $120,000 per year. If an investor requires a 7% cap rate, what is the maximum price they should pay?
A$1,500,000
B$1,600,000
C$1,714,286✓ Correct
D$1,800,000
Explanation
Maximum Price = NOI ÷ Cap Rate = $120,000 ÷ 0.07 = $1,714,286.
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