Property Valuation
A Michigan appraiser applies the income approach to a 12-unit apartment building. Net operating income is $96,000 and the cap rate is 8%. The indicated value is:
A$768,000
B$1,200,000✓ Correct
C$960,000
D$1,080,000
Explanation
Value = NOI / Cap Rate = $96,000 / 0.08 = $1,200,000.
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