What is borrowing capacity and how is it calculated? Using the following data, calculate the borrowing capacity and the feasible debt ratio for a project which has a capital investment plan of $200 million.

Cost of debt: 6%

Cash flow coverage ratio = 1.5

Ten-year operating cash flows:

Year	Operating cash flows (millions)
1	$22.21
2	$24.30
3	$24.43
4	$25.65
5	$27.90
6	$28.31
7	$30.76
8	$31.30
9	$32.93
10	$34.66