QUESTION #1 Given the following information, calculate the debt coverage ratio (DCR) of this commercial...
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Finance
QUESTION #1
Given the following information, calculate the debt coverage ratio (DCR) of this commercial loan.
Estimated net operating income (NOI) in the first year: $135,000 Debt service in the first year: $85,000 Loan amount: $960,000 Purchase price: $1,600,000
Note: enter answer as a number with two decimal points, for example: 1.75 (rather than rounding up to 1.80) or 0.62 (rather than rounding down to 0.6)
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QUESTION #2
Is the DCR you calculated in Question #1 acceptable to a lender? Why or why not?
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