Property Valuation
A property earns $48,000 in annual net operating income. An appraiser uses a 7.5% capitalization rate. What is the estimated value?
A$580,000
B$620,000
C$640,000✓ Correct
D$680,000
Explanation
Value = NOI ÷ Cap Rate. $48,000 ÷ 0.075 = $640,000. The income capitalization approach estimates the property's value at $640,000.
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