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What is a major drawback of project finance from the project sponsor's perspective?
  • a)
    Loss of control over the project company.
  • b)
    Higher interest rates on loans.
  • c)
    Inability to attract investors.
  • d)
    Limited tax benefits for the project.
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
What is a major drawback of project finance from the project sponsor's...
A major drawback of project finance from the project sponsor's perspective is the loss of control over the project company. When using project finance, the project company is usually set up as an independent entity with its own balance sheet. This separation means that the project sponsor may have limited control over the day-to-day operations and decisions of the project company, which can be a disadvantage.
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What is a major drawback of project finance from the project sponsor's perspective?a)Loss of control over the project company.b)Higher interest rates on loans.c)Inability to attract investors.d)Limited tax benefits for the project.Correct answer is option 'A'. Can you explain this answer?
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