QuestionWhat is the property value if annual net income is \$22,000 and capitalization rate is 8%? Options: \$275,000, \$176,000, \$200,000, \$183,000.

Studdy Solution

STEP 1

Assumptions1. The annual net income from the property is \$22,000. The capitalization rate is8%
3. The value of the property is calculated using the income approach, which is the net income divided by the capitalization rate

STEP 2

First, we need to find the value of the property using the income approach. We can do this by dividing the net income by the capitalization rate.
$Property\, value = \frac{Net\, income}{Capitalization\, rate}$

STEP 3

Now, plug in the given values for the net income and capitalization rate to calculate the property value.
$Property\, value = \frac{\$22,000}{8\%}$

STEP 4

Convert the percentage to a decimal value.
$8\% =0.08$ $Property\, value = \frac{\$22,000}{0.08}$

STEP 5

Calculate the property value.
$Property\, value = \frac{\$22,000}{0.08} = \$275,000$ The value of the property using the income approach is \$275,000.

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QuestionWhat is the property value if annual net income is \$22,000 and capitalization rate is 8%? Options: \$275,000, \$176,000, \$200,000, \$183,000.

Studdy Solution

STEP 1

Assumptions1. The annual net income from the property is \$22,000. The capitalization rate is8%
3. The value of the property is calculated using the income approach, which is the net income divided by the capitalization rate

STEP 2

First, we need to find the value of the property using the income approach. We can do this by dividing the net income by the capitalization rate.
$Property\, value = \frac{Net\, income}{Capitalization\, rate}$

STEP 3

Now, plug in the given values for the net income and capitalization rate to calculate the property value.
$Property\, value = \frac{\$22,000}{8\%}$

STEP 4

Convert the percentage to a decimal value.
$8\% =0.08$ $Property\, value = \frac{\$22,000}{0.08}$

STEP 5

Calculate the property value.
$Property\, value = \frac{\$22,000}{0.08} = \$275,000$ The value of the property using the income approach is \$275,000.

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QuestionWhat is the property value if annual net income is \$22,000 and capitalization rate is 8%? Options: \$275,000, \$176,000, \$200,000, \$183,000.

Studdy Solution

STEP 1

Assumptions1. The annual net income from the property is \$22,000. The capitalization rate is8%3. The value of the property is calculated using the income approach, which is the net income divided by the capitalization rate

STEP 2

First, we need to find the value of the property using the income approach. We can do this by dividing the net income by the capitalization rate.Property value=Net incomeCapitalization rateProperty\, value = \frac{Net\, income}{Capitalization\, rate}Propertyvalue=CapitalizationrateNetincome​

STEP 3

Now, plug in the given values for the net income and capitalization rate to calculate the property value.Property value=$22,0008%Property\, value = \frac{\$22,000}{8\%}Propertyvalue=8%$22,000​

STEP 4

Convert the percentage to a decimal value.8%=0.088\% =0.088%=0.08Property value=$22,0000.08Property\, value = \frac{\$22,000}{0.08}Propertyvalue=0.08$22,000​

STEP 5

Calculate the property value.Property value=$22,0000.08=$275,000Property\, value = \frac{\$22,000}{0.08} = \$275,000Propertyvalue=0.08$22,000​=$275,000The value of the property using the income approach is \$275,000.

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Assumptions1. The annual net income from the property is \$22,000. The capitalization rate is8%
3. The value of the property is calculated using the income approach, which is the net income divided by the capitalization rate

First, we need to find the value of the property using the income approach. We can do this by dividing the net income by the capitalization rate.
$Property\, value = \frac{Net\, income}{Capitalization\, rate}$

Now, plug in the given values for the net income and capitalization rate to calculate the property value.
$Property\, value = \frac{\$22,000}{8\%}$

Convert the percentage to a decimal value.
$8\% =0.08$ $Property\, value = \frac{\$22,000}{0.08}$

Calculate the property value.
$Property\, value = \frac{\$22,000}{0.08} = \$275,000$ The value of the property using the income approach is \$275,000.