Real Estate Math
A NJ commercial property generates $120,000 NOI annually. If an investor requires a 7.5% cap rate, what should they pay?
A$1,400,000
B$1,500,000
C$1,600,000✓ Correct
D$1,700,000
Explanation
Value = NOI ÷ Cap Rate = $120,000 ÷ 0.075 = $1,600,000.
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