Annuity G Has the Same I and PMT as Annuity

question 78

Essay

Annuity G has the same i and PMT as Annuity H. G has twice as many payments as H. Is G's present value (pick one): (i) double, (ii) more than double, or (iii) less than double the amount of H's present value? Give the reason for your choice.

Understand the role of diminishing marginal returns in shaping the expected-rate-of-return curve for R&D investments.

Recognize different sources of funds for R&D and their implications for R&D decision making.

Determine the conditions under which a firm should expand or reduce its R&D expenditures.

Understand the concept and importance of process innovation in improving production methods and its impact on a firm's total product curve and cost structure.