Real Estate Math
A West Virginia investment property generates annual NOI of $45,000. An investor wants a 9% capitalization rate. What is the maximum price the investor should pay?
A$405,000
B$500,000✓ Correct
C$450,000
D$400,000
Explanation
Value = NOI / Cap Rate = $45,000 / 0.09 = $500,000.
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