A capitalization rate of 8% on a property with $40,000 NOI indicates a value of:

$320,000 is mathematically incorrect and cannot be derived from the given NOI and cap rate using any standard appraisal formula; it may result from multiplying NOI by the cap rate ($40,000 × 8 = $320,000) rather than dividing, which is the most common arithmetic error on this type of question.

$400,000 is incorrect and may result from dividing $40,000 by 0.10 (a 10% cap rate) rather than the stated 8% cap rate, suggesting a confusion between the given cap rate and a round number the test-taker substituted.

$480,000 does not result from any standard application of the income capitalization formula with the given inputs and appears to be a distractor designed to catch test-takers who make arithmetic errors or misplace decimal points during calculation.