Property Valuation
An appraiser determines a Wisconsin property's value using the income approach. The property has an annual NOI of $45,000 and a cap rate of 9%. What is the indicated value?
A$400,000
B$450,000
C$500,000✓ Correct
D$550,000
Explanation
Value = NOI ÷ Cap Rate = $45,000 ÷ 0.09 = $500,000. To solve this, multiply the relevant values: $45,000 at 9%.. The correct answer is $500,000.. This is a common calculation on the Wisconsin real estate exam.
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