Your client owns a six-story office building that generates gross rental revenues of $389,000; operating expenses of $123,000; interest expense of $160,000; and income taxes of $26,000. You are going to lend $2,000,000 at a market rate of 8 percent with a 20-year amortization. What is the actual debt service coverage ratio 01.2 O 1.33 O 1.5
Your client owns a six-story office building that generates gross rental revenues of $389,000; operating expenses of $123,000; interest expense of $160,000; and income taxes of $26,000. You are going to lend $2,000,000 at a market rate of 8 percent with a 20-year amortization. What is the actual debt service coverage ratio 01.2 O 1.33 O 1.5
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Your client owns a six-story office building that generates gross rental revenues of
$389,000; operating expenses of $123,000; interest expense of $160,000; and
income taxes of $26,000. You are going to lend $2,000,000 at a market rate of 8
percent with a 20-year amortization. What is the actual debt service coverage ratio?
O 1.2
O 1.33
O 1.5
1.66
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