Feasibility studies assess a municipality’s ability to successfully complete a project by considering economic, legal, technical, scheduling, and other factors. Often, bondholders use feasibility studies to determine the risk-to-reward profile of a project.
For example, suppose that a municipality wants to build a new bridge that connects two major thoroughfares. Rather than simply asking for the money, the government can reduce the risk premium demanded by investors by first completing a feasibility study.
