Property Valuation
A Mississippi property has a net operating income of $18,000 per year. If the capitalization rate is 9%, the indicated value using the income approach is:
A$162,000
B$180,000
C$200,000✓ Correct
D$185,000
Explanation
Value = NOI ÷ Cap Rate = $18,000 ÷ 0.09 = $200,000. To solve this, multiply the relevant values: $18,000 at 9%.. The correct answer is $200,000.. This is a common calculation on the Mississippi real estate exam.
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