Concerning the Impact on ROIC of Capitalizing R&D,will Increasing the Asset

question 3

Multiple Choice

Concerning the impact on ROIC of capitalizing R&D,will increasing the asset life and/or the percentage of revenues spent on R&D increase ROIC?

• A)Increasing either the asset life or the percentage of revenues spent on R&D will increase ROIC.
• B)Neither increasing the asset life nor increasing the percentage of revenues spent on R&D will increase ROIC.
• C)Increasing the asset life will increase ROIC,but increasing the percentage of revenues spent on R&D will not.
• D)Increasing the asset life will not increase ROIC,but increasing the percentage of revenues spent on R&D will.

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for implementing the country's monetary policy.

Consumer Spending

The aggregate spending of families within an economy on goods and services.

45-Degree Line

A reference line in economics, usually on a graph, where all points along the line indicate where the values for the variables on the axes are equal.

Consumer Dollar

The purchasing power of a consumer's money, indicating the quantity of goods and services it can buy.