ASC ASC Debt and Financing Analysis 2

Question 1

In ARGUS, what does the amortization period refer to in debt modeling?

Accepted Answer

The period over which principal payments are calculated

Answer

The amortization period determines the schedule used to calculate principal repayment, even if the actual loan term is shorter.

Question 2

Which ratio is most commonly used by lenders to determine maximum loan proceeds in commercial real estate?

Accepted Answer

DSCR

Answer

Lenders primarily use DSCR to ensure the property generates sufficient income to cover debt service obligations.

Question 3

In ARGUS, refinancing a property before the hold period ends is modeled by:

Accepted Answer

Entering a new loan in the debt schedule at the refinance date

Answer

To model a refinance, you enter a new loan at the projected refinance date, which pays off the existing debt and resets loan terms.

Question 4

What is a prepayment penalty in the context of ARGUS debt modeling?

Accepted Answer

A charge imposed by the lender when the loan is paid off before maturity

Answer

A prepayment penalty is a fee the lender charges if the borrower repays the loan before its maturity date.

Question 5

In ARGUS, loan proceeds from a refinancing event appear in the cash flow as:

Accepted Answer

A capital event financing inflow

Answer

Refinancing proceeds appear as a capital event (financing inflow) separate from operating cash flows in the ARGUS model.

(ASC) Argus Software Certification Practice Test