Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 1

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Prepare for the Certified Apartment Portfolio Supervisor Exam with flashcards and multiple choice questions. Each question provides detailed explanations and hints to enhance your learning. Excel in your exam endeavor!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Which financial metric does DCR represent?

Debt Coverage Ratio
Debt Collection Ratio
Debt Consolidation Rate
Debt Credit Ratio

The correct answer is: Debt Coverage Ratio

The correct choice identifies DCR as the Debt Coverage Ratio. This financial metric is important for assessing the ability of an entity, such as an apartment portfolio, to cover its debt obligations with its income. Essentially, the Debt Coverage Ratio measures the net operating income (NOI) generated by the property against the annual debt service. A higher ratio indicates a stronger ability to meet debt payments, signaling financial stability to lenders and investors. Understanding the Debt Coverage Ratio is crucial for property management professionals. It allows them to evaluate the financial health of the portfolio and make informed decisions regarding investments, refinancing, or strategic planning. In contrast, the other options do not accurately represent DCR in the context of financial metrics for real estate or property management. Each of those terms, while they may sound relevant, does not pertain to the calculation or assessment of financial viability in the same way that the Debt Coverage Ratio does.