Which of the Below Statements Is TRUE

question 27

Multiple Choice

Which of the below statements is TRUE?

• A) The debt-to-service coverage ratio (DSC ratio) is the ratio of a property's net operating income (NOI) multiplied by the debt service.
• B) The higher the DSC ratio, the more likely it is that the borrower will be able to meet debt servicing from the property's cash flow.
• C) The NOI is defined as the rental income plus cash operating expenses (adjusted for a replacement reserve).
• D) A ratio less than 1 for DSC means that the cash flow from the property is sufficient to cover debt servicing.

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