To find the investment value of a property with a NOI of $1,340,000 and a cap rate of 7.5%, what calculation is used?

To determine the investment value of a property based on its Net Operating Income (NOI) and the capitalization rate (cap rate), the correct calculation is to divide the NOI by the cap rate. The formula for calculating investment value can be expressed as:

Investment Value = NOI / Cap Rate.

This calculation converts the income generated by the property (NOI) into a property value by factoring in the expected rate of return on investment expressed through the cap rate. Thus, in this scenario, with an NOI of $1,340,000 and a cap rate of 7.5%, applying the formula yields:

Investment Value = $1,340,000 / 0.075 = $17,866,667.

This means that the investment value of the property would be approximately $17.87 million. The cap rate reflects the anticipated return on investment, making it an essential component for evaluating the property's worth based on its income potential.