Property Valuation
A Hawaii rental property has a net operating income of $60,000. If the cap rate is 5%, what is the indicated value?
AA. $300,000
BB. $600,000
CC. $1,200,000✓ Correct
DD. $3,000
Explanation
Value = NOI / Cap Rate = $60,000 / 0.05 = $1,200,000. To solve this, multiply the relevant values: $60,000 at 5%.. The correct answer is C. $1,200,000.. This is a common calculation on the Hawaii real estate exam.
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