When Categorizing Risk in New-Product Development,the Highest Level of Risk

question 3

Multiple Choice

When categorizing risk in new-product development,the highest level of risk occurs when

• A)competitors copy products and sell them at a lower price.
• B)supplier cost savings are not achieved.
• C)the product takes sales away from existing products.
• D)the product fails to generate sales.
• E)inadequate supply of materials delays production.

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Definitions:

Investment

The allocation of resources (such as capital or time) with the expectation of receiving future returns.

Fair Value

The price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Unrealized Profits

Profits that have occurred on paper due to an asset's increased value but have not yet been cashed in by selling the asset.

Realized Profits

Refers to the gains earned and received from the sale of assets or investments, distinguished from those merely existing on paper.