What is the maximum supportable annual debt service

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Property generates $500,000 of net operating income over 12 months.

Minimum acceptable debt coverage ratio will be 1.20 and that loan terms will be 4.5 percent per annum, with 20-year amortization (monthly payments).

a. What is the maximum supportable annual debt service?

b. What size loan does this imply?

Reference no: EM132389752

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