Question

For a project to be viable, the first necessary condition is

• A. That it should have a market
• B. That it should have government support
• C. That its expected return should be greater than bank rate
• D. That it should be based on tried and tested technology

Answer 1

The Correct Option is A

To determine the most viable projects, it's important to understand the fundamental conditions that ensure success. Let's analyze the options provided regarding the necessary conditions for a project's viability.

1. That it should have a market: This is the fundamental condition for a project's viability. A project must have an identified market demand to be successful. Without a market, there would be no customers to sell the product or service to, making the project non-viable. This is the correct option because identifying and understanding your target market allows you to tailor offerings, set competitive prices, and allocate resources effectively.
2. That it should have government support: While government support can enhance a project's success probability, it is not a necessary condition. Many projects thrive without direct government support through private investments and market forces alone.
3. That its expected return should be greater than the bank rate: While financial returns are crucial, they are considered after establishing that there is a market. Expected returns influence whether stakeholders will invest in a project but come into play only after establishing the project's initial viability.
4. That it should be based on tried and tested technology: Although using tried and tested technology can minimize risk, innovation often requires venturing into newer technologies to meet market demands. Therefore, while advantageous, it is not mandatory for initial viability.

Conclusion: The necessity of having a market underpins any project's viability. Without an identified and viable market, even projects supported by governments or using the latest technology cannot succeed. Hence, the correct answer is "That it should have a market".