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

estimated value = $240000

so correct option is C. 240000

Step-by-step 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 =
`(net\ income\ annual)/(rate)`

estimated value =
`(21600)/(0.09)`

estimated value = $240000

so correct option is C. 240000