A Computer Company Has $3,000,000 in Research and Development Costs

question 198

Multiple Choice

A computer company has $3,000,000 in research and development costs. Before accounting for these costs, the net income of the company is $3,600,000. What is the amount of net income or loss before taxes after these research and development costs are accounted for?

• A) $600,000 loss.
• B) $3,000,000 net income.
• C) $600,000 net income.
• D) Cannot be determined from the information provided.

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Definitions:

Current Ratio

A measure of a business's capability to meet its obligations due in less than one year, focusing on its short-term financial health.

Company

A legal entity formed by individuals, stockholders, or shareholders, with the purpose of operating for profit.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund day-to-day operations.

Company

An organized entity formed for the purpose of conducting business, wherein it can earn revenues, incur expenses, and operate with the aim of profit.