ASC Debt and Financing Analysis Flashcards
6 cards from real ASC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 ASC Debt and Financing Analysis flashcards as text
In ARGUS, what does the amortization period refer to in debt modeling?
Answer: The period over which principal payments are calculated
The amortization period determines the schedule used to calculate principal repayment, even if the actual loan term is shorter.
Which ratio is most commonly used by lenders to determine maximum loan proceeds in commercial real estate?
Answer: DSCR
Lenders primarily use DSCR to ensure the property generates sufficient income to cover debt service obligations.
In ARGUS, refinancing a property before the hold period ends is modeled by:
Answer: Entering a new loan in the debt schedule at the refinance date
To model a refinance, you enter a new loan at the projected refinance date, which pays off the existing debt and resets loan terms.
What is a prepayment penalty in the context of ARGUS debt modeling?
Answer: A charge imposed by the lender when the loan is paid off before maturity
A prepayment penalty is a fee the lender charges if the borrower repays the loan before its maturity date.
In ARGUS, loan proceeds from a refinancing event appear in the cash flow as:
Answer: A capital event financing inflow
Refinancing proceeds appear as a capital event (financing inflow) separate from operating cash flows in the ARGUS model.
What does debt yield measure in commercial real estate lending?
Answer: NOI divided by the loan amount
Debt yield is calculated as NOI divided by the loan amount and indicates the income return a lender would receive if they took ownership.