Real Estate Math
A South Dakota commercial property sells for $1,200,000. The NOI is $96,000. What is the capitalization rate?
A7%
B8%✓ Correct
C9%
D10%
Explanation
Cap Rate = NOI ÷ Sale Price = $96,000 ÷ $1,200,000 = 0.08 = 8%.
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