City has a population of 50,000. During this fiscal year, the city generated general revenues of $30 million. The primary revenue source is property tax. The taxable property value is $1,250 million. The debt outstanding and the debt service is 37 million and 2.7 million respectively. If the benchmark debt service ratio is 10 percent. Assume an annual interest rate of 4 percent and a twenty-year maturity for the debt, how much additional debt can the city carry?
City has a population of 50,000. During this fiscal year, the city generated general revenues of $30 million. The primary revenue source is property tax. The taxable property value is $1,250 million. The debt outstanding and the debt service is 37 million and 2.7 million respectively. If the benchmark debt service ratio is 10 percent. Assume an annual interest rate of 4 percent and a twenty-year maturity for the debt, how much additional debt can the city carry?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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City has a population of 50,000. During this fiscal year, the city generated general revenues of $30 million. The primary revenue source is property tax. The taxable property value is $1,250 million. The debt outstanding and the debt service is 37 million and 2.7 million respectively.
If the benchmark debt service ratio is 10 percent. Assume an annual interest rate of 4 percent and a twenty-year maturity for the debt, how much additional debt can the city carry?
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