Property Valuation
An appraiser is using the income approach to value a small apartment building. The property generates $96,000 annual gross income and has a 10% vacancy rate, operating expenses of $30,000, and a cap rate of 8%. What is the indicated value?
A$825,000
B$756,000✓ Correct
C$900,000
D$780,000
Explanation
EGI = $96,000 × (1 – 0.10) = $86,400.
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