Real Estate Math
An Oklahoma commercial property produces annual NOI of $96,000. If similar properties sell at a 7.5% cap rate, what is the estimated value?
A$1,200,000
B$1,280,000✓ Correct
C$1,380,000
D$1,350,000
Explanation
Value = NOI / Cap rate = $96,000 / 0.075 = $1,280,000. To solve this, multiply the relevant values: $96,000 at 7.5%.. The correct answer is $1,280,000.. This is a common calculation on the Oklahoma real estate exam.
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