Real Estate Math
A Wisconsin property owner wants to sell a commercial building with an NOI of $75,000. Comparable buildings sell at a 6% cap rate. What is the indicated value?
A$1,100,000
B$1,200,000
C$1,250,000✓ Correct
D$1,300,000
Explanation
Value = NOI / Cap Rate = $75,000 / 0.06 = $1,250,000.
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