Finance
A South Dakota property with a $300,000 mortgage has a debt coverage ratio (DCR) of 1.25. The annual debt service is $24,000. What is the NOI?
A$19,200
B$24,000
C$30,000✓ Correct
D$37,500
Explanation
DCR = NOI ÷ Annual Debt Service. NOI = DCR × Debt Service = 1.25 × $24,000 = $30,000. Using the values given ($300,000, $24,000), apply the appropriate formula.. The correct answer is $30,000.. This is a common calculation on the South Dakota real estate exam.
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