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Given the following information, calculate the debt coverage ratio (DCR) of this commercial loan. . Estimated net operating income (NOI) in the first year: $155,000
Given the following information, calculate the debt coverage ratio (DCR) of this commercial loan. . Estimated net operating income (NOI) in the first year: $155,000 Debt service in the first year: $100,000 Loan amount: $900,000 Purchase price: $1,300,000 . Note: enter answer as a decimal with two decimal points, for example: 1.15 (rather than rounding up to 1.20) or 0.62 (rather than rounding down to 0.60). If you round your answer to one decimal point, you may get this problem wrong. Your Answer: Answer Question 2 (1 point) Explain how you calculated DCR in the previous question. Show your math, including each step. Question 3 (1 point) Is the DCR you calculated above acceptable to a lender? Why or why not? Comment on what the DCR means, how lenders use it and what range they would find acceptable. Do they want it to be high or low? Is there a minimum and if so, why
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