A Lender Requires a 1

question 10

Multiple Choice

A lender requires a 1.20 debt coverage ratio as a minimum.If the net operating income of a property is $45,000,what annual amount of debt service would provide the required debt coverage ratio?

• A)$37,500 or higher
• B)$37,500 or lower
• C)$54,000 or higher
• D)$54,000 or lower

---

Definitions:

Product Cost Information

Data about the total cost incurred to produce a product, including materials, labor, and overhead.

Inventory

A company's stock of goods or materials that are held for sale or used in production.

Rate Increases

An upward adjustment in prices, charges, or interest rates, typically within a business or economic context.

Process Costing

A costing method used in manufacturing where costs are assigned to a product based on the process it goes through in the production cycle.