Property Valuation
An appraiser uses the income approach to value a commercial building in Biloxi, Mississippi. The appraiser divides the net operating income (NOI) by the capitalization rate to determine:
AGross rent multiplier
BReplacement cost
CMarket value✓ Correct
DAssessed value
Explanation
In the income approach, Market Value = NOI ÷ Capitalization Rate. This formula converts the property's income stream into an estimate of market value.
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