contestada

assume a retail shopping center can be purchased for $5.5 million. the center's first year noi is expected to be $489,500. a$4,000,000 loan has been requested. the loan carries a 9.25 percent fixed contract rate, amortized monthly over 25 years with a 7-year term. what will be the property's (annual) debt coverage ratio in the first year of operations? group of answer choices 1.40 1.19 0.84 0.08

Respuesta :

The property's annual debt-service coverage ratio is 1.19. The correct answer is option B.

What is a Debt-service coverage ratio?

The debt-service coverage ratio (DSCR) measures a company's available cash flow to pay off its current debt obligations. The DSCR informs investors about a company's ability to pay its debts.

Debt-service coverage ratio is a indicator of a company's financial health, especially for a company having a high leverage and carrying a lot of debt. The ratio compares a company's total debt obligations (including principal repayments and some capital lease agreements) to its operating income. The formula for calculating the Debt- service coverage ratio is DSCR= Net Operating Income/Total Debt Service

Therefore, the debt service coverage ratio of the property is 1.19.

To learn more about debt-service coverage, click here:

https://brainly.com/question/29347508

#SPJ1

Otras preguntas