Property Valuation
In a Vermont appraisal using the income approach, which formula directly links net operating income to value?
AValue = NOI × Gross Rent Multiplier
BValue = NOI ÷ Capitalization Rate✓ Correct
CValue = NOI + Depreciation
DValue = NOI × (1 + Growth Rate)
Explanation
The income approach formula is Value = Net Operating Income ÷ Capitalization Rate (V = NOI / R). For example, a property generating $50,000 NOI at a 5% cap rate is valued at $1,000,000.
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