Which of the Following Involves Costs That Most Likely Occur

question 153

Multiple Choice

Which of the following involves costs that most likely occur during the commercialization stage of new product development?

• A) building or renting a manufacturing facility
• B) paying target customers for product feedback
• C) determining the product's planned distribution
• D) developing a prototype of the product
• E) identifying target markets

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Average Accounting Return

The ratio of the average net income that an investment generates to the average book value of the investment over its life.

Salvage Value

The estimated residual value of an asset after it has been fully depreciated and is no longer in use.

Straight-line Method

A technique that evenly distributes the expense of an asset across its lifespan for depreciation calculation.