A Lender Requires a 1

question 15

Multiple Choice

A lender requires a 1.20 debt coverage ratio as a minimum.If the net operating income of a property is $60,000,what is the maximum amount of debt service the lender would allow?

• A)$30,000
• B)$50,000
• C)$60,000
• D)$72,000

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Definitions:

Event of Damage

A specific incident that causes physical harm to property or person, potentially covered by insurance.

Antilapse Clause

A provision in a will that allows the gifts to substitute beneficiaries if the original beneficiary is deceased.

Grace Period

A grace period is a set length of time after a due date during which a payment can be made without penalty.

Commercial Insurance

Insurance that covers some type of business risk.