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san4es73 [151]
2 years ago
7

g 3) You are interested in purchasing an apartment complex for $2,000,000 that has Net Operating Income (NOI) of $120,000 and is

financed with an 80% LTV mortgage at 4% A. What is the Cap Rate
Business
1 answer:
Paraphin [41]2 years ago
4 0

Answer:

the cap rate is 6%

Explanation:

The computation of the cap rate is as follows:

= Net operating Income ÷ Current market value of property

= $120,000 ÷  $2,000,000

= .06

=  6%

Hence, the cap rate is 6%

We simply divided the net operating income from the Current market value of property so that the cap rate could come

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