Real Estate Math
A North Dakota investor expects a 12% return on their investment. They estimate annual NOI of $24,000. What is the maximum price they should pay for the property?
A$175,000
B$200,000✓ Correct
C$225,000
D$288,000
Explanation
Maximum price = NOI / Required return = $24,000 / 0.12 = $200,000. To solve this, multiply the relevant values: $24,000 at 12%.. The correct answer is $200,000.. This is a common calculation on the North Dakota real estate exam.
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