Property Valuation
A Wisconsin property's net operating income is $36,000 and the capitalization rate is 8%. What is the indicated value?
A$288,000
B$360,000
C$400,000
D$450,000✓ Correct
Explanation
Value = NOI ÷ Cap Rate = $36,000 ÷ 0.08 = $450,000. To solve this, multiply the relevant values: $36,000 at 8%.. The correct answer is $450,000.. This is a common calculation on the Wisconsin real estate exam.
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