An office building grosses $850,000 per year and expenses of 35% of the gross. If the property is capitalized at 12% what is its value?

first calculate the total expense by multiplying $850,000 * 35% = $297,500.

Next calculate the net operating income $850,000 - $297,500 = 552,500.

Then take the net income of $552,600 and divide by 12% = 4,604,167

so your answer is 4,604,167