Real Estate Math
A Wisconsin commercial building generates $120,000 annual NOI. An investor wants a 7% cap rate. What is the indicated value?
A$1,500,000
B$1,600,000
C$1,700,000✓ Correct
D$1,800,000
Explanation
Value = NOI / Cap Rate = $120,000 / 0.07 = $1,714,285 ≈ $1,700,000 (rounded to nearest $100,000 option).
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