Real Estate Math
An Iowa farmland lease at $200/acre/year for 160 acres. The landowner pays $4,800 in property taxes and earns a 5% net return on investment. What is the indicated farm value?
A$924,000
B$640,000
C$1,024,000
D$544,000✓ Correct
Explanation
Gross rent = 160 acres x $200 = $32,000. NOI = $32,000 - $4,800 = $27,200.
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