Real Estate Math
A commercial property generates annual gross income of $180,000, has operating expenses of $72,000, and the investor requires a 9% cap rate. What is the estimated value?
A$1,000,000
B$1,200,000✓ Correct
C$1,400,000
D$1,600,000
Explanation
NOI = $180,000 - $72,000 = $108,000. Value = NOI / Cap Rate = $108,000 / 0.
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