We discussed two separation principles in Chapter $3.$ One was the separation of

consumption and investment. The best description of this is $...$

A$)$ An individual can separate their investment decision from their preferences

for consumption. They shofidd always invest in positive NPV projects and

then they can borrow or lend to move money to satisfy their consumption

preferences.

B$)$ A company's investment decision is separate from their financing decision.

This is because in a normal market investing has $NPV=0,$ so it does not

affect the financing of investment projects.

C$)$ A company's investment decision is separate from their financing decision.

This is because in a normal market financing has NPV $=0,$ so it does not

affect the NPV of investment projects.

D$)$ An individual can separate their investment decision from their preferences

for consumption. They should always invest in positive NPV projects and

then they can liquidate other positive NPV projects to get money to satisfy

their consumption preferences.