1 2 3 You are interested in purchasing a business. Current owner of the business is asking $750,000. You estimated that you can borrow a 15-year term loan at 5% interest. You expect 18% return from this project. Current owner opened up the books and you estimated future cash flows. You also estimated that you would be able to sell the business for about $1,100,000 at the end of year 10. Year EBITDA 75,000 78,000 81,000 84,000 87,000 92,000 97,000 102,000 107,000 10 112,000 4 5 6 6 7 8 Looking at forecasted cash flows, what will be first year's Debt Service Coverage (DSC) ratio if your payments are $40,000? Select one: a. 7.2 b. 1.36 c.0.53 d. 1.88