Property Valuation
When appraising a Mississippi Gulf Coast resort property, an appraiser uses the income approach and calculates an overall capitalization rate of 8.5%. The property's NOI is $102,000. The indicated value is:
A$867,000
B$1,200,000✓ Correct
C$850,000
D$918,000
Explanation
Value = NOI ÷ Cap Rate = $102,000 ÷ 0.085 = $1,200,000. The income approach divides net operating income by the capitalization rate to derive property value.
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