Real Estate Math
A Mississippi apartment manager improves energy efficiency, reducing utility expenses from $18,000 to $12,000 annually. Using a 7% cap rate, the increase in property value from this NOI improvement is approximately:
A$85,714✓ Correct
B$42,857
C$60,000
D$6,000
Explanation
NOI increase = $18,000 - $12,000 = $6,000 per year. Value increase = NOI Increase ÷ Cap Rate = $6,000 ÷ 0.
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