Real Estate Math
A Hawaii property has an annual NOI of $45,000 and a cap rate of 6%. What is the value using income capitalization?
AA. $270,000
BB. $750,000✓ Correct
CC. $2,700
DD. $750
Explanation
Value = NOI / Cap Rate = $45,000 / 0.06 = $750,000. To solve this, multiply the relevant values: $45,000 at 6%.. The correct answer is B. $750,000.. This is a common calculation on the Hawaii real estate exam.
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