General Studies · Cash Flow Waterfall
In a structured project finance arrangement, the 'Cash Flow Waterfall' mechanism is designed to:
- 1ensure that dividend payments are prioritized over mandatory debt servicing.
- 2define the predefined order of priority for the application of project revenues towards various obligations.✓
- 3allow the project sponsor to withdraw surplus cash before meeting tax liabilities.
- 4subordinate operating and maintenance expenses to the repayment of senior debt.
Correct answer
define the predefined order of priority for the application of project revenues towards various obligations.
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