If a property has a net operating income of $24,000 per year and an 8% capitalization rate, what is the property value excluding land value of $115,000?

To calculate the property value using the net operating income (NOI) and the capitalization rate, the formula is:

Property Value = Net Operating Income / Capitalization Rate

Given that the net operating income is $24,000 and the capitalization rate is 8% (or 0.08 when expressed as a decimal), you can substitute these values into the formula:

Property Value = $24,000 / 0.08

Calculating this gives:

Property Value = $300,000

However, this calculation represents the overall value of the property including the land value. Since the question specifies to exclude the land value of $115,000, you would need to subtract that amount from the total property value:

$300,000 - $115,000 = $185,000.

Thus, the correct property value, excluding the land value, is $185,000. This is why the first choice is the correct answer.

The other choices represent incorrect calculations of either the total property value or incorrect adjustments for the land value.