Real Estate Math
A Louisiana property's NOI is $67,500. If an investor requires a 7.2% cap rate, what is the maximum they should pay?
A$875,000
B$937,500✓ Correct
C$812,500
D$900,000
Explanation
Maximum price = NOI ÷ Cap Rate = $67,500 ÷ 0.072 = $937,500. To solve this, multiply the relevant values: $67,500 at 7.2%.. The correct answer is $937,500.. This is a common calculation on the Louisiana real estate exam.
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