Real Estate Math
A building has a net operating income of $48,000 per year. If the market cap rate is 8%, what is the estimated value?
A$384,000
B$500,000
C$600,000✓ Correct
D$480,000
Explanation
Value = NOI ÷ Cap Rate = $48,000 ÷ 0.08 = $600,000.
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