Real Estate Math
A Virginia commercial property has an annual NOI of $120,000 and a cap rate of 7.5%. What is the estimated value?
A$1,200,000
B$1,400,000
C$1,600,000✓ Correct
D$900,000
Explanation
Value = NOI ÷ Cap Rate = $120,000 ÷ 0.075 = $1,600,000. To solve this, multiply the relevant values: $120,000 at 7.5%.. The correct answer is $1,600,000.. This is a common calculation on the Virginia real estate exam.
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