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20% cushion rule

Definition:

Guideline that revenues from facilities financed by municipal bonds should exceed the operating budget plus maintenance costs and debt service by at least 20% to allow for unforeseen expenses.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Concentration services

Movement of cash from different lockbox locations into a single concentration account from which disbursements and investments are made.

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