The Main Difference Between Project Finance and Other Forms of Lending

question 45

Multiple Choice

The main difference between project finance and other forms of lending is:

• A) lenders base their participation on expected future cash flows and assets of the project.
• B) lenders take a major equity stake in the project.
• C) the project company, which is set up as a separate legal entity, relies heavily on venture capitalists for equity funding.
• D) the lenders have a claim on the assets of the project as well as the sponsors.

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Definitions:

Experiment

An organized experiment designed for the purpose of exploring new knowledge, evaluating a supposition, or confirming a recognized fact.

Random Assignment

A method used in experiments to assign participants to different groups using randomization, ensuring each participant has an equal chance of being assigned to any group.

Experimental Research

A systematic and scientific approach to research in which the researcher manipulates one or more variables to observe the effect on some behavior or mental process.

Survey

A method of gathering information from a sample of individuals through questions to generalize findings to a larger population.