Property Valuation
In a capitalization rate analysis, if an Iowa investment property has a NOI of $30,000 and the market cap rate is 6%, the indicated value is:
A$180,000
B$500,000✓ Correct
C$300,000
D$1,800,000
Explanation
Value = NOI / Cap Rate = $30,000 / 0.06 = $500,000. The capitalization rate converts the annual net operating income into an estimate of present value.
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