What is the property value if the Net Operating Income is $175,000 and the capitalization rate is 7.5%?

To find the property value based on the Net Operating Income (NOI) and the capitalization rate, you can use the formula:

Property Value = Net Operating Income / Capitalization Rate.

In this case, the Net Operating Income is $175,000 and the capitalization rate is 7.5%, which can be expressed as a decimal (0.075).

Plugging in the numbers:

Property Value = $175,000 / 0.075.

When you perform the division, you calculate:

Property Value = $175,000 / 0.075 = $2,333,333.33.

When rounding to the nearest whole number, this is typically represented as $2,333,333.

Thus, the correct calculation confirms that the property value is indeed $2,333,333, justifying the answer choice. This method provides a quick yet effective way to assess the value of an income-producing property based on its net operating income and cap rate.