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    Question

    Debt Service Coverage Ratio is calculated

    as:
    A EBIT/Interest Correct Answer Incorrect Answer
    B (Net Profit + Depreciation)/Debt Service Correct Answer Incorrect Answer
    C Current Assets/Current Liabilities Correct Answer Incorrect Answer
    D Total Debt/Total Assets Correct Answer Incorrect Answer

    Solution

    DSCR = (Net Profit + Depreciation + Interest + Non-cash expenses)/(Interest + Principal repayments). It measures ability to service debt.

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