Question: Given: Project cost: $ 1 0 , 0 0 0 , 0 0 0 Bank loan at 7 0 % loan to value Debt service

Given:
Project cost: $10,000,000
Bank loan at 70% loan to value
Debt service requirement: 1.4 times
25 year amortization with a 10 year balloon payment
Interest rate: 6%
Net Operating Income (NOI): $750,000
One payment per year
What is the debt service ratio?

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