Real Estate Math
Using the income approach, a property with an annual NOI of $72,000 and a cap rate of 8% is valued at:
A$576,000
B$900,000✓ Correct
C$720,000
D$800,000
Explanation
Value = NOI ÷ Cap Rate = $72,000 ÷ 0.08 = $900,000.
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