Appraiser III Practice Exam 2025 – The All-in-One Guide to Master Your Certification!

The correct operation in the VIM (Value = Income / Rate) formula is to multiply when calculating the value from the income and capitalization rate. In the context of income-producing properties, determining value involves rearranging the VIM formula to find how much income will yield a specific value based on the capitalization rate.

In this formula, if you start with the income and want to find the value, you would actually perform this calculation: Value = Income x Capitalization Rate. This highlights how multiplicative relationships are foundational in property valuation, as value increases in relation to income when examined in terms of investment returns.

When considering the potential operations that could occur in the context of the VIM formula, multiplying the income by the capitalization rate directly generates the property value, whereas the other operations—adding, subtracting, or dividing—would not yield the desired relationship for determining value based on income in this context.