Suppose the Net Operating Income NOI) in a Property Is

question 18

Multiple Choice

Suppose the Net Operating Income NOI) in a property is $5,000,000 and the market value cap rate is 9.00%. What is the market value of the property using direct capitalization?

• A) $450,000
• B) $4,500,000
• C) $5,450,000
• D) $45,000,000
• E) $55,555,556

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Definitions:

Economy State

The current conditions and overall health of a country's economy, influenced by factors such as GDP growth, unemployment rates, and inflation.

Required Return

The minimum return an investor expects to achieve on an investment, considering its risk.

Expected Market Return

The anticipated average rate of return on an investment portfolio or a market index over a certain period, based on historical data and market conditions.

Risk-Free Rate

The return on an investment with no risk of financial loss, often represented by government bonds.