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A county government is preparing its capital improvement plan and the capital budget The planning process involves a forecast of total debt needed to finance
A county government is preparing its capital improvement plan and the capital budget The planning process involves a forecast of total debt needed to finance the projects in the plan. As a financial analyst for the county, you ate asked to prepare a debt capacity analysis Your forecast of the debt levels is based on the proposed capital projects and their funding sources. Table 13.4 shows your forecast of the general obligation bonds and the revenues that can be used to pay for the debt over the next five years. The benchmark debt service ratio for the county is 12 percent. The county also uses a target debt service ratio of 9 percent The debt history of the county indicates that the county's funding for public services will be affected negatively if the debt ratio exceeds 9 percent. In the debt capacity analysis, identify any additional debt capacity in the next five years and discuss the debt affordability of the county. Prepare a debt capacity report to make recommendations for live county's debt management policies
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