The Opportunity Cost of Capital Must Be the Minimum Required

Multiple Choice

The opportunity cost of capital must be the minimum required return from any project. Which of the following options best explains why that must be so?

A) Brokers must be able to invest the funds for themselves externally.
B) An internal investment must offer investors more than they can achieve by investing the funds for themselves.
C) An internal investment must offer investors less than they can achieve by saving the funds.
D) An external investment must offer the firm more than they can achieve by saving the funds.