Property Valuation
A Mississippi commercial property generates $72,000 annual net operating income. If the market cap rate is 9%, what is the estimated value?
A$648,000
B$800,000✓ Correct
C$720,000
D$900,000
Explanation
Value = NOI ÷ Cap Rate = $72,000 ÷ 0.09 = $800,000. To solve this, multiply the relevant values: $72,000 at 9%.. The correct answer is $800,000.. This is a common calculation on the Mississippi real estate exam.
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