Firms Have Several Sources of Funds to Finance Their R&D

question 121

Multiple Choice

Firms have several sources of funds to finance their R&D activities, including the following, except

• A)loans obtained from banks and bondholders.
• B)retained earnings or corporate savings.
• C)venture capital and personal savings.
• D)anticipated profits from forthcoming new products.

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Definitions:

Expenses

Costs incurred by a business in the process of earning revenue.

Revenues

Total financial earnings of a company derived from its key operational processes, including the sale of products or services.

Equity

The value of the shares issued by a company, representing the ownership interest in the company's assets after liabilities are subtracted.

Accounts Payable

The short-term liabilities or obligations a company owes to its suppliers or creditors for goods and services received.