what period do you depreciate the dog over?
I appreciate both my dogs every day. Even with they bark, scratch and wee.
As for tenants' dogs, I always say yes. Good dogs owners are usually stable people. Bad dog owners shouldn't be allowed to live in anyones house and never ever in one of mine. If they keep a messy house now, then having a dog will allow them to keep it messy. If the house is tidy, I think they will keep it so with a dog.
But your tenants signed a no pet lease, then it's quite rightly your call. As someone else said, check to see as they may already have one.