Real Estate Cap Rate & Cash-on-Cash Return implementation

Binding contract

This record describes what an executable surface must bind and validate. It does not claim that a public calculator, package, or production route is deployed.

Record owner

Guth Instruments

Lifecycle

verified-clean

Evidence ID

t5-160

Effect

Computation or source lookup only

Input and validation requirements

Zero purchase price or zero cash invested produces undefined metrics, so the instrument must reject those inputs or show explicit undefined/error results. A separate hazard is sign ambiguity for negative annual cash flow, which can reverse cash-on-cash from -20% to +20% if losses are treated as unsigned magnitudes.

Required corrections

No binding erratum is attached to this unique-name record. Implementers must still preserve the declared units, domain, and failure behavior.

Inspectable interface fixture

The sample below is evidence for interface and validation tests, not a production implementation.

{
  "inputs": {
    "currency": "USD",
    "purchase_price": 250000,
    "NOI": 18000,
    "cash_invested": 75000,
    "annual_cash_flow": 6000
  },
  "expected_outputs": {
    "cap_rate_percent": 7.2,
    "cash_on_cash_percent": 8
  },
  "working": "cap rate = NOI / purchase price = 18,000 / 250,000 = 0.072; 0.072 × 100 = 7.2%. cash-on-cash = annual cash flow / cash invested = 6,000 / 75,000 = 0.08; 0.08 × 100 = 8%."
}

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche5/tranche5-results.json