Real Estate Math
A Nevada commercial property has an NOI of $85,000 and is purchased at a 5.5% cap rate. What is the purchase price?
A$1,545,455✓ Correct
B$1,466,667
C$850,000
D$467,500
Explanation
Value = NOI ÷ Cap Rate = $85,000 ÷ 0.055 = $1,545,455.
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