What is the formula for IRV where V represents value?

The formula for IRV, where "V" represents value, is correctly expressed as V = I ÷ R. In this formula, "I" denotes the income generated by a property, and "R" represents the capitalization rate, which is the rate of return on an investment property.

To determine the value of a property using income and the capitalization rate, the income is divided by the rate. This reflects the relationship between these factors; as the income increases or the cap rate decreases, the value of the property increases. Investors utilize this formula to establish a property’s worth based on its income potential relative to market rates of return.

Other formulations provided do not correctly represent how value, income, and the capitalization rate interact in the context of property assessment and valuation. The IRV formula specifically relies on division to yield the value from the income and rate, making the selection of the correct formula essential for accurate property assessments.