Property Valuation
A South Carolina appraiser performs the income approach using a direct capitalization rate. The formula is:
AValue = Cap Rate × NOI
BValue = NOI ÷ Cap Rate✓ Correct
CValue = Gross Income × Cap Rate
DValue = Cap Rate ÷ NOI
Explanation
Direct capitalization formula: Value = NOI ÷ Cap Rate. The cap rate represents the rate of return an investor expects from the property.
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