Real Estate Math
A duplex generates annual gross income of $42,000. Operating expenses are $16,800. The property is valued using a direct cap rate of 7%. What is the estimated value?
A$360,000✓ Correct
B$600,000
C$306,000
D$240,000
Explanation
NOI = $42,000 − $16,800 = $25,200. Value = NOI ÷ Cap Rate = $25,200 ÷ 0.
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