Property Valuation
A Washington appraiser values an income property with an NOI of $60,000 and applies a 7.5% capitalization rate. What is the indicated value?
A$450,000
B$700,000
C$800,000✓ Correct
D$900,000
Explanation
Value = NOI ÷ Cap Rate = $60,000 ÷ 0.075 = $800,000. The income capitalization approach divides annual net income by the appropriate cap rate.
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