Real Estate Math
If a property's NOI is $55,000 and the cap rate is 7%, the indicated value is:
A$550,000
B$785,714✓ Correct
C$770,000
D$400,000
Explanation
Value = NOI ÷ Cap Rate = $55,000 ÷ 0.07 = $785,714. To solve this, multiply the relevant values: $55,000 at 7%.. The correct answer is $785,714.. This is a common calculation on the New York real estate exam.
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