Question

A property has a monthly net income of $1800, and an appraiser believes a 9 percent rate of return is appropriate for the property. Its value would be estimated at____________.
A. 20000
B. 21600
C. 240000
D. 2400000

Answer 1

Answer:

estimated value =  $240000

so correct option is C. 240000

Explanation:

given data

net income = $1800

rate of return = 9%

to find out

estimated value

solution

net income annual will be  = net income ×  12 (months)

net income annual  = $1800 ×  12

net income annual  = $21,600

so estimated value will be

estimated value = $\frac{net\ income\ annual}{rate}$

estimated value = $\frac{21600}{0.09}$

estimated value =  $240000

so correct option is C. 240000