Real Estate Math
A Maine commercial property produces $80,000 NOI. If the owner wants a 9% return on their investment, what price should they pay?
A$720,000
B$800,000
C$888,889✓ Correct
D$900,000
Explanation
Value = NOI ÷ Cap Rate = $80,000 ÷ 0.09 = $888,889. To solve this, multiply the relevant values: $80,000 at 9%.. The correct answer is $888,889.. This is a common calculation on the Maine real estate exam.
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