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    Question

    You are an analyst working in the finance department of

    a large corporation. Your team is tasked with evaluating the company's total debt service costs for the upcoming fiscal year. This involves calculating all financial obligations related to the company's debt that ensure the company remains in good standing with its creditors. This comprehensive assessment is crucial for maintaining the company's financial health and planning future cash flows. Total debt service cost implies which among the following?
    A Principal repayment obligations only Correct Answer Incorrect Answer
    B Interest Payment Correct Answer Incorrect Answer
    C Any sinking fund obligation Correct Answer Incorrect Answer
    D A and B Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Total debt service cost means any fixed obligation for the company. it can be calculated as: Total debt service cost = principal repayment + interest payment + any other sinking fund obligation

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