Real Estate Math

A property has an NOI of $60,000 and a cap rate of 5%. What is the indicated value?

A$900,000
B$1,000,000
C$1,200,000✓ Correct
D$1,500,000

Explanation

Value = NOI ÷ Cap Rate = $60,000 ÷ 0.05 = $1,200,000.

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