Property Valuation
When an appraiser uses the income approach to value a Maryland apartment building with a NOI of $90,000 and a cap rate of 7.5%, what is the estimated value?
A$675,000
B$900,000
C$1,200,000✓ Correct
D$1,250,000
Explanation
Value = NOI ÷ Cap rate = $90,000 ÷ 0.075 = $1,200,000.
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