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 market.
B) they are unable to adjust their savings and consumption in the financial market.
C) if 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 first principle of finance suggests that an individual will only invest in a project if it is at least as desirable as what is available in the financial markets. This means that the potential return on investment from the project should be equal or greater than the potential return from other available investment opportunities. Therefore, choice C is the correct answer.

The First or Basic Principle of Finance Dictates That an Individual