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An investor is willing to pay $1,200,000 for a project with annual net operating income of $60,000. Suppose the investor bought the project for $1,200,000,

An investor is willing to pay $1,200,000 for a project with annual net operating income of $60,000. Suppose the investor bought the project for $1,200,000, and managed to reduce operating costs by $5,000? Applying a 5% cap rate, what change did the investor cause in the value of the property?

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