Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assuming the following data, determine the following: You can purchase an office building for $15,000,000. The bank has quoted a 60% LTV, and a

 

Assuming the following data, determine the following: You can purchase an office building for $15,000,000. The bank has quoted a 60% LTV, and a 1.30 DCR (Debt Coverage Ratio). The loan would be amortized for 30 years, the annual interest rate is 4.5%. The annual NOI is $850,000. a) Determine the maximum amount of the loan based on the LTV b) Determine the monthly payment of the loan using the PMT function in excel c) Determine the DCR-Debt Coverage Ratio d) How large of a loan could you obtain using the Debt Coverage Ratio and LTV as the two factors to consider.

Step by Step Solution

3.46 Rating (156 Votes )

There are 3 Steps involved in it

Step: 1

Information given Office Building value LTV 1500000000 60 Debt Coverage Ratio 13 Amort... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Financial Accounting

Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald

1st Canadian Edition

1118849388, 9781119048572, 978-1118849385

More Books

Students also viewed these Accounting questions

Question

Explain why a company might want to split its shares.

Answered: 1 week ago