Property Valuation
An Ohio appraiser uses the 'direct capitalization' method. They divide the property's NOI by the market cap rate to arrive at:
AThe property's replacement cost
BAn indicated value for the property✓ Correct
CThe property's annual debt service
DThe property's assessed value for tax purposes
Explanation
Direct capitalization divides the property's stabilized NOI by a market-derived cap rate to produce an indicated value: Value = NOI / Cap Rate.
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