Real Estate Math
An Iowa property has a net operating income of $24,000 and a cap rate of 8%. What is the estimated value?
A$192,000
B$300,000✓ Correct
C$240,000
D$480,000
Explanation
Value = NOI / Cap Rate = $24,000 / 0.08 = $300,000. To solve this, multiply the relevant values: $24,000 at 8%.. The correct answer is $300,000.. This is a common calculation on the Iowa real estate exam.
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