Real Estate Math
A Missouri property has an annual NOI of $72,000 and a cap rate of 6%. If the cap rate rises to 7.5%, the property's value would change from $1,200,000 to:
A$900,000
B$960,000✓ Correct
C$1,000,000
D$1,440,000
Explanation
Original value = $72,000 / 0.06 = $1,200,000.
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