Property Valuation
A Louisiana commercial property generates an annual NOI of $95,000. If the market capitalization rate for similar properties is 7.5%, the indicated value is approximately:
A$1,166,667
B$1,233,333
C$1,266,667✓ Correct
D$1,400,000
Explanation
Value = NOI ÷ Cap Rate = $95,000 ÷ 0.075 = $1,266,667. To solve this, multiply the relevant values: $95,000 at 7.5%.. The correct answer is $1,266,667.. This is a common calculation on the Louisiana real estate exam.
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