A property with an annual net income of $5,000 and a rate of return of 11% would have an indicated value of?

To determine the indicated value of the property based on its annual net income and the rate of return, the formula used is:

Indicated Value = Annual Net Income / Rate of Return.

In this case, the annual net income is $5,000, and the rate of return is 11%, which can be expressed as a decimal (0.11).

Using the formula:

Indicated Value = $5,000 / 0.11.

When you perform the calculation:

Indicated Value = $5,000 / 0.11 = $45,454.55, which when rounded is approximately $45,455.

Therefore, the indicated value of the property is $45,455, which aligns with the correct answer. This calculation reflects the concept that the value of an investment property can be derived from the income it generates, adjusted for the expected rate of return. The higher the rate of return, the lower the value of the property will be, given a constant income, and vice versa.