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NEW QUESTION: 1
A small office building that recently sold for $175,000 generates annual net operating income of
$ 27,500. Using a 12% capitalization rate, how much NOI should a property generate under the income approach if the market value of the building is $195,000?
Under the income approach, assuming a capitalization rate of 12%, a building with a market value of $195,000 should generate NOI of: NOI = MV x k = $195,000 x .12 = $23,400.
NEW QUESTION: 2