How the debt capacity of a governmental entity is determined


Problem: Before meeting with the Learning Team, each individual team member should run the "Accounting for Governmental Funds" simulation. As a team, prepare a paper that includes the following:

a. Discuss how the debt capacity of a governmental entity is determined.
b. Evaluate the effect of refunding or reorganizing existing debt obligations.
c. Analyze various funding alternatives that can be used to support debt obligation.
d. Describe how rating agencies evaluate governmental risk.

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Accounting Basics: How the debt capacity of a governmental entity is determined
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