Property Valuation
A property generates a net operating income (NOI) of $45,000 annually. Using a capitalization rate of 7.5%, what is the estimated value?
A$337,500
B$450,000
C$600,000✓ Correct
D$675,000
Explanation
Value = NOI ÷ Cap rate = $45,000 ÷ 0.075 = $600,000. The capitalization rate converts income into a value estimate.
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