definition of debt service cost
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- The debt service coverage ratio  (DSCR), also known as debt coverage ratio (DCR), is the ratio of cash available for debt servicing to interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity's (person or corporation) ability to produce enough cash to cover its debt (including lease) payments.
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- uk ​ us ​. › FINANCE an amount of debt that is owed on something such as a credit card, and that changes according to how much money people borrow and pay back regularly: In 2006, the average American household carried about $7,200 in revolving debt (mostly on credit cards) and $21,000 in total debt.
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debt financing debt financing. The acquisition of funds by borrowing. For example, a business may use debt financing to raise funds for constructing a new factory. Corporations find debt financing attractive because the interest paid on borrowed funds is a tax-deductible expense. Compare equity financing.
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What is 'Debt Service' This ratio helps to determine the borrower’s ability to make debt service payments, because it compares the company’s net income to the amount of principal and interest the firm must pay. If a lender decides that a business cannot generate consistent earnings to service debt, the lender doesn't make the loan.
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debt Legal Definition of debt. 1  1 : something owed: as a : a specific sum of money or a performance due another especially by agreement (as a loan agreement) to pay the debts…of the United States — U.S. Constitution art.
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What is a 'Bad Debt Expense' What is a 'Bad Debt Expense'. Bad debt expense represents the amount of uncollectible accounts receivable that occurs in a given period. Bad debt expense occurs as a result of a customer being unable to fulfill its obligation to pay an outstanding debt due to bankruptcy or other financial problems. This expense is the cost of a business having the inability to collect its debts.
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Government Budget Deficits and Government Debt Definitions and Basics. Government debt is the stock of outstanding IOUs issued by the government at any time in the past and not yet repaid. Governments issue debt whenever they borrow from the public; the magnitude of the outstanding debt equals the cumulative amount of net borrowing that the government has done.
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- Cost of debt. An organization's cost of debt is the effective rate (overall average percentage) that it pays on all its debts, the major part of which typically consist of bonds and bank loans. Cost of debt is a part of a company's capital structure. (along with preferred stock, common stock, and cost of equity).ost of debt. An organization's cost of debt is the effective rate (overall average percentage) that it pays on all its debts, the major part of which typically consist of bonds and bank loans. Cost of debt is a part of a company's capital structure. (along with preferred stock, common stock, and cost of equity).
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Debt ratio Debt ratio. Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill').
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Beware of Card Services Scams Debt Assistance Scams. Other fraudulent callers seek to exploit the fact that many people face mounting credit card bills. The callers make unsolicited phone calls promising to help lower a person’s interest rates. They usually require the consumer to pay high up-front fees of as much as $2,000 or more.
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How Long Is a Master's in Computer Engineering Degree Program? Holding a master's degree in computer engineering may open the door to job opportunities, higher-than-average wages, and career advancement. Find out how long it takes to complete this degree program, and check out career information.
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Debt Coverage Ratio (DCR) & Debt Service Coverage Ratio (DSCR) A debt coverage ratio (DCR) of greater than 1, e.g. 1.25, means that the property generates enough cash flow to cover its operating expenses plus an additional 25% more to cover the properties debt payments. Most lenders require a debt coverage ratio (DCR) of between 1.25 – 1.35.
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DEFINITION of 'Agency Cost Of Debt' DEFINITION of 'Agency Cost Of Debt'. A problem arising from the conflict of interested created by the separation of management from ownership (the stockholders) in a publicly owned company.EFINITION of 'Agency Cost Of Debt'. A problem arising from the conflict of interested created by the separation of management from ownership (the stockholders) in a publicly owned company.
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What is 'Long-Term Debt' DEFINITION of 'Long-Term Debt'. Long-term debt consists of loans and financial obligations lasting over one year. Long-term debt for a company would include any financing or leasing obligations that are to come due in a greater than 12-month period. Long-term debt also applies to governments: nations can also have long-term debt.
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- debt service meaning, definition, what is debt service: the act of regularly paying back a debt, including interest: . Learn more.
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Debt Coverage Ratio (DCR) & Debt Service Coverage Ratio (DSCR) Real Estate Definitions for Real Estate Investing. Debt Coverage Ratio (DCR) or Debt Service Coverage Ratio (DSCR) The debt coverage ratio measures the ability to pay the property’s monthly mortgage payments from the cash generated from renting the property.
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Subpart 32.6âContract Debts (b) Contract debts include, but are not limited to, the following: (1) Billing and price reductions resulting from contract terms for price redetermination or for determination of prices under incentive type contracts. (2) Price or cost reductions for defective certified cost or pricing data.
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- (c) Debt collection service includes the service performed for which a fee is collected under Section 3.506, Business & Commerce Code. The person collecting the check shall add the amount of the tax to the fee in accordance with Section 151.052 and shall collect the fee from the drawer or endorser of the check.
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How do Pokemon that require friendship evolve? While the maximum possible happiness points is 255, you need at least 220 happiness points for a Pokemon that requires happiness to evolve. Once it reaches the requirements, it will have to gain at least 1 level to evolve.
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- The 2-percentage-point fee reduction yields a nominal dollar savings of $4.5 billion less $0.9 billion for additional national debt service cost for a net savings of about $3.6 billion. The government’s lower cost of capital helps achieve the net savings.
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Department of the Treasury Preguntas Más Frecuentes. Fiscal Service, a bureau of the U.S. Department of the Treasury, serves as the government's central debt collection agency, maintaining the government's delinquent debts. One of the ways used by Fiscal Service to collect delinquent debt is the Treasury Offset Program or TOP.
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- Definition of DEBT SECURITY: A debt instrument that is issued with a repayment promise on a date at a specific interest The Law Dictionary Featuring Black's Law Dictionary Free Online Legal Dictionary 2nd Ed.
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- Debt Service Loans. Districts in which the levy required to make debt service payments on local bond issues exceeds 29.39 percent of ANTC by 10 percent, or by $5,000, can obtain a debt service loan from the state.
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Do companies measure their cost of debt with before- or after-tax returns? Do companies measure their cost of debt with before- or after-tax returns? Cost of debt is most easily defined as the interest rate lenders charge on borrowed funds. When comparing similar sources of debt capital, this definition of cost is useful in determining which source costs the least.
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- DEFINITION of 'Credit Card Debt'. A type of unsecured liability which is incurred through a short-term revolving loan facility. While, technically, all purchases made by credit card create a debt to the user, these debts typically do not incur interest until the grace period has expired. Thus, credit card users who pay off their balance each month are generally not considered to have credit card debt. Rather, the term applies to users who continue to carry a balance on their credit cards after the grace period has expired and the debt begins to bear interest.
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What Is a Debt Service Ratio In a Business Loan? Debt Service and Your Business Taxes For income tax purposes, the interest on business loans (and payments for some capital leases) is considered a deductible business expense, while the principal is not.