Real Estate Math
A Hawaii investor wants a 10% return on a $1,200,000 commercial property. What annual NOI is needed?
AA. $12,000
BB. $120,000✓ Correct
CC. $1,200,000
DD. $200,000
Explanation
Required NOI = Value × Cap Rate = $1,200,000 × 0.10 = $120,000. To solve this, multiply the relevant values: $1,200,000 at 10%.. The correct answer is B. $120,000.. This is a common calculation on the Hawaii real estate exam.
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