Real Estate Math

A Louisiana real estate investor calculates a debt coverage ratio (DCR) on a property with annual NOI of $84,000 and annual debt service of $67,200. What is the DCR?

A1.15
B1.25✓ Correct
C1.35
D1.45

Explanation

DCR = NOI ÷ Annual Debt Service = $84,000 ÷ $67,200 = 1.25.

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