Real Estate Math
A Grand Forks commercial building has an annual NOI of $95,000. An investor requires a 9.5% return. What should the investor pay?
A$1,000,000✓ Correct
B$902,500
C$950,000
D$1,100,000
Explanation
Value = NOI ÷ Cap Rate = $95,000 ÷ 0.095 = $1,000,000.
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