Property Valuation
A South Carolina commercial property generates $120,000 in annual NOI. Using a cap rate of 8%, what is the indicated value using the income approach?
A$960,000
B$1,200,000
C$1,500,000✓ Correct
D$1,800,000
Explanation
Value = NOI ÷ Cap Rate. $120,000 ÷ 0.08 = $1,500,000. To solve this, multiply the relevant values: $120,000 at 8%.. The correct answer is $1,500,000.. This is a common calculation on the South Carolina real estate exam.
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