Which of the Following Research and Development Related Costs Should

question 82

Multiple Choice

Which of the following research and development related costs should be capitalized and depreciated over current and future periods?

• A) Research and development general laboratory building which can be put to alternative uses in the future
• B) Inventory used for a specific research project
• C) Administrative salaries allocated to research and development
• D) Research findings purchased from another company to aid a particular research project currently in process

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Definitions:

Positive External Benefits

Benefits experienced by third parties or the society at large due to an economic activity, which are not reflected in the market price of goods or services.

Government Intervention

The involvement of the government in the market to correct market failures and promote economic stability and growth.

Flu Vaccines

Vaccines that protect against influenza, a contagious respiratory illness caused by influenza viruses.

Marginal Social Benefits

The extra advantage obtained by society from the consumption of an additional unit of any product or service.