An Amount of R&D Spending That Is Greater Than the Optimal

question 69

Multiple Choice

An amount of R&D spending that is greater than the optimal amount indicates that the

• A) marginal benefit of R&D expenditures is equal to the marginal cost.
• B) marginal benefit of R&D expenditures is greater than the marginal cost.
• C) interest-rate cost-of-funds is less than the expected rate of return.
• D) interest-rate cost-of-funds is greater than the expected rate of return.

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Definitions:

Face Value

The face value or the amount in dollars shown on a bond, note, or any financial instrument, representing its value upon reaching maturity.

Current Yield

A financial ratio that calculates the annual interest or dividends received from an investment as a percentage of the current market price.

Coupon

The face value percentage that represents the yearly interest payment on a bond.

Semiannually

Occurring or conducted twice a year; typically refers to payments, reports, or evaluations made every six months.