Question

In a Term Loan appraisal, the 'DSCR' is a critical

Q: Answer-In a Term Loan appraisal, the 'DSCR' is a critical ratio. What does a DSCR of less than 1 indicate?

Debt Service Coverage Ratio DSCR Net Operating Income Total Debt Service. A DSCR below 1 means the projects operating cash flows are insufficient to cover the annual principal and interest payments, signaling higher credit risk.

ratio. What does a DSCR of less than 1 indicate?

A The project is highly profitable

B The project has insufficient cash flow to cover its debt obligations

C The project's assets are more than its liabilities

D The borrower has a high credit rating

E The project is in the initial stage

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In a Term Loan appraisal, the 'DSCR' is a critical

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