Real Estate Math
A Missouri investor's property has a $95,000 loan balance. NOI is $14,250 annually. Debt service is $12,000 annually. The debt coverage ratio (DCR) is:
A0.84
B1.19✓ Correct
C1.33
D7.92
Explanation
DCR = NOI / Annual Debt Service = $14,250 / $12,000 = 1.1875, approximately 1.19. A DCR above 1.0 means the property generates enough income to cover its debt payments.
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