Real Estate Math
An appraiser determines that a property generates $36,000 in NOI annually and applies a 7.5% cap rate. What is the estimated value?
A$270,000
B$360,000
C$480,000✓ Correct
D$540,000
Explanation
Value = NOI ÷ Cap Rate = $36,000 ÷ 0.075 = $480,000. To solve this, multiply the relevant values: $36,000 at 7.5%.. The correct answer is $480,000.. This is a common calculation on the New Hampshire real estate exam.
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