Question: Ruby is attempting to value an income-producing property using the direct capitalization approach. Using data from comparable properties, Ruby estimates that the current cap rate

Ruby is attempting to value an income-producing property using the direct capitalization approach. Using data from comparable properties, Ruby estimates that the current cap rate is approximately 8.50%. If the projected first-year potential gross income (PGI) is $73,250 and the net operating income (NOI) is $44,500, what is the indicated value of the subject using direct capitalization?

A. $552,795

B. $861,765

C. $523,529

D. $909,938

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