Explain what is wrong with the given statement

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Question: Explain what is wrong with the following statement: A developer would be crazy not to use a construction loan to finance construction costs. Not only does it shift some of the development risk to the lender without giving up any of the developer's potential upside gain if the project is a home run, but the added financial leverage always, ex ante, generates a higher (time 0) NPV of development.

Reference no: EM131737054

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