Real Estate Math
A Kentucky horse farm generates $250,000 annual gross income. Operating expenses are $140,000. At an 8% cap rate, what is the estimated market value?
A$1,100,000
B$1,250,000
C$1,375,000✓ Correct
D$1,750,000
Explanation
NOI = $250,000 − $140,000 = $110,000. Value = NOI ÷ Cap Rate = $110,000 ÷ 0.
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