Finance
An Alaska property has a mortgage constant of 7.2% and an NOI of $54,000. If the debt coverage ratio requirement is 1.2, what is the maximum loan amount the lender would approve?
A$541,667
B$625,000✓ Correct
C$750,000
D$531,250
Explanation
Maximum debt service = NOI ÷ DCR = $54,000 ÷ 1.2 = $45,000.
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