Real Estate Math
A West Virginia investor wants a 10% return on an income property. If the annual NOI is $24,000, what is the maximum price the investor should pay?
A$200,000
B$240,000✓ Correct
C$280,000
D$320,000
Explanation
Value = NOI ÷ Cap rate = $24,000 ÷ 0.10 = $240,000.
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