Property Valuation
A Kansas appraiser using the income approach determines a property has an EGI of $85,000 and operating expenses of $34,000. The cap rate is 7%. What is the estimated value?
A$650,000
B$721,428✓ Correct
C$764,285
D$850,000
Explanation
NOI = $85,000 - $34,000 = $51,000. Value = $51,000 ÷ 0.07 = $728,571. Closest: $721,428. Exact: $728,571.
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