Property Valuation
A property in Raleigh, NC has a net operating income of $48,000 and the market capitalization rate is 8%. Its estimated value using the income approach is:
A$384,000
B$480,000
C$600,000✓ Correct
D$576,000
Explanation
Value = NOI divided by Cap Rate = $48,000 divided by 0.08 = $600,000. To solve this, multiply the relevant values: $48,000 at 8%.. The correct answer is $600,000.. This is a common calculation on the North Carolina real estate exam.
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