The first or basic principle of finance dictates that an individual will invest in a project if:
A) they are made better off in the financial markets.
B) they are unable to adjust their savings and consumption in the financial markets.
C) the project is at least as desirable as what is available in the financial markets.
D) the interest rate for borrowing and lending is not equal.

Question

Quizplus · Accepted Answer

The basic principle of finance suggests that an individual will invest in a project if it offers a return that is at least as desirable as the return they could receive by investing in the financial markets. This means the project's potential benefits must be competitive with or exceed what the individual could achieve through other available investment opportunities.

The First or Basic Principle of Finance Dictates That an Individual