SALESPERSON ONLINE COMPUTRAINER
Master Exam #3
Question 138 of 150
Question: "Capitalization" is a process used to:
A: Find the interest rate;
B: Convert income into value;
C: Establish the market value;
D: Determine the net income.
Correct Answer is : B
The annual net income is capitalized at a percentages rate (capitalization rate) to determine the value. By using the capitalization process, the appraiser arrives at value by an analysis of the income.