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Four Basic Approaches Exist to Determine R&D Budget Allocations

question 114

Essay

Four basic approaches exist to determine R&D budget allocations. What are these approaches? Which one would you recommend for a pharmaceutical company? Why?


Definitions:

Compounded Semiannually

Interest on an investment that is calculated twice a year and added to the principal sum.

Initial Deposit

The first sum of money placed into an account or investment, serving as the starting balance.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, so that the balance doesn't merely grow, it grows at an increasing rate.

Future Value

The future value of a current asset, calculated by applying an estimated growth rate over a specific period.

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