Property Valuation
An appraiser using the income approach determines a South Dakota property's value at $400,000 with a cap rate of 7.5%. What is the NOI?
A$25,000
B$30,000✓ Correct
C$32,000
D$37,500
Explanation
NOI = Value × Cap Rate = $400,000 × 7.5% = $30,000. To solve this, multiply the relevant values: $400,000 at 7.5%.. The correct answer is $30,000.. This is a common calculation on the South Dakota real estate exam.
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