The Table Shows the Rate of Return and R&D Spending

question 306

Multiple Choice

The table shows the rate of return and R&D spending for a hypothetical firm. Assume the interest-rate cost of funds is 7 percent. What is the optimal amount of R&D expenditures?

• A)$30 billion
• B)$42 billion
• C)$36 billion
• D)$48 billion

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Definitions:

Company's Responsibility

The duty of a corporation to act ethically towards its employees, customers, society, and the environment in its operations.

Relationship-Oriented

A business or marketing approach that prioritizes building long-term relationships with customers over immediate sales or transactions.

Salesperson

An individual who sells goods and services to others in exchange for money or other compensation.

Chamber of Commerce

A local or national organization of business owners and professionals aiming to promote and protect the interests of its members.