Property Valuation
The income approach formula is:
AValue = NOI × Cap Rate
BValue = NOI ÷ Cap Rate✓ Correct
CValue = Gross Rent ÷ Cap Rate
DValue = NOI + Land Value
Explanation
The income approach formula is: Value = Net Operating Income ÷ Capitalization Rate. A higher cap rate produces a lower value; a lower cap rate produces a higher value.
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