Assume That a Firm's Interest-Rate Cost-Of-Funds Curve for R&D Is

question 43

Multiple Choice

Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would increase a firm's optimal R&D expenditures and, in equilibrium, reduce the expected rate of return on the last dollar of R&D?

• A) a rightward shift of the expected-rate-of-return curve
• B) an upward shift of the interest-rate cost-of-funds curve
• C) a leftward shift of the expected-rate-of-return curve
• D) a downward shift of the interest-rate cost-of-funds curve

Distinguish between variable and fixed costs in the context of contribution and traditional income statements.

Understand the concepts of sunk costs, opportunity costs, differential costs, and how they differ from one another.

Recognize the limitations of traditional income statements for internal decision-making purposes.

Understand how committed fixed costs behave in the short run and their impact on cost management.

---

Definitions:

Signal Benefit

The advantage gained by individuals from communicating certain information to others, often in the context of mating or social interaction.

Eavesdropping

In animal behavior, the act of intercepting and using signals or communication between other individuals to one's own advantage.

Tail Length

The measured distance from the base to the tip of an animal's tail, often relevant in studies of animal behavior or morphology.

Honest Signals

Communicative actions or displays that convey accurate information about an organism's capabilities, intentions, or genetic quality to others.