Real Estate Math
A Virginia commercial property's NOI is $75,000 and the value is $1,000,000. If the NOI increases to $85,000 with the same cap rate, what is the new value?
A$1,050,000
B$1,083,333
C$1,100,000
D$1,133,333✓ Correct
Explanation
Cap rate = $75,000 ÷ $1,000,000 = 7.5%. New value = $85,000 ÷ 0.075 = $1,133,333. Using the values given ($75,000, $1,000,000), apply the appropriate formula.. The correct answer is $1,133,333.. This is a common calculation on the Virginia real estate exam.
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