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3 years ago

A property valued at $350,000 has an annual net operating income of $43,750. What is the capitalization rate?

Business

1 answer:

Zinaida [17]3 years ago

5 0

<u>Answer:</u> The capitalization rate is 12.5 %

<u>Explanation:</u>

To calculate the capitalization rate, we use the formula:

$\text{Rate of capitalization}=\frac{\text{Income}}{\text{Value of property}}\times 100$

We are given:

Net operating income = $ 43,750

Value of property = $ 350,000

Putting values in above equation, we get:

$\text{Rate of capitalization}=\frac{43,750}{350,000}\times 100\\\\\text{Rate of capitalization}=12.5\%$

Hence, the capitalization rate is 12.5 %

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3 years ago

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3 years ago

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3 years ago

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2 years ago

Read 2 more answers

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Answer:

Entry is given below

Explanation:

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3 years ago