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    Question

    When calculating the Debt Service Coverage Ratio (DSCR),

    which financial metric is reintegrated into both the numerator and denominator to assess a company's ability to cover its debt servicing obligations?
    A Tax Expenses Correct Answer Incorrect Answer
    B Operating Income Correct Answer Incorrect Answer
    C Depreciation and Amortization Correct Answer Incorrect Answer
    D Administrative Expenses Correct Answer Incorrect Answer
    E Interest onTerm Loans Correct Answer Incorrect Answer

    Solution

    Interest on term loans is added back when calculating DSCR to accurately measure the cash available for debt servicing, highlighting a company's capability to meet its loan obligations. Interest is added in both the numerator and denominator to assess a company's ability to cover its debt servicing obligations.

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