Real Estate Math
A Maryland commercial building has an annual NOI of $85,000 and sells for $1,062,500. What is the capitalization rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap Rate = NOI ÷ Sale Price = $85,000 ÷ $1,062,500 = 0.08 = 8%.
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