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    Question

    If a project has annual cash accruals of ₹18 crore and

    its annual term loan obligation, including principal and excluding interest is ₹10 crore. The cost of debt per annum is ₹2 crore. What is the DSCR? What does this DSCR imply?  
    A 1.2 – Just adequate Correct Answer Incorrect Answer
    B 1.5 – Comfortable Correct Answer Incorrect Answer
    C 1.0 – Break even Correct Answer Incorrect Answer
    D 9.0 – Excellent Correct Answer Incorrect Answer
    E 1.8 – Comfortable Correct Answer Incorrect Answer

    Solution

    DSCR = Cash Accrual / Debt Obligation = 18 / (10+2) = 1.5  Above 1.33 is generally comfortable. 

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