If Take-Home Pay Is $10,000 and Debt Service Charges Are

question 14

True/False

If take-home pay is $10,000 and debt service charges are $4,000,the debt service coverage ratio is 0.40.

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Definitions:

Depreciation Expense

Apportioning a physical asset’s cost over its estimated useful life.

Straight-Line Method

The straight-line method is a technique of allocating an asset's cost evenly throughout its useful life, commonly used for depreciation and amortization calculations.

Salvage Value

The approximated market price of an asset upon completing its useful life.

Depreciation Expense

The allocated portion of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.