Which of the Following Measures Assesses the Ratio of the Firm's

question 3

Multiple Choice

Which of the following measures assesses the ratio of the firm's total profits from new products to its total expenditures?

• A) Return on innovation
• B) Average cycle time of the innovation
• C) Percent of development projects meeting deadlines
• D) Percent of development projects within the estimated budget

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Definitions:

Operating Working Capital

Current assets minus current liabilities, reflecting the short-term liquidity of a business.

Expansion Projects

Initiatives undertaken by a firm to increase its capacity or operations, often requiring significant capital investment.

Replacement Projects

Investments undertaken to replace old or obsolete assets with new ones, aiming to maintain or enhance efficiency, productivity, or the competitive position of a business.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not factor into the decision-making process for future investments.