Which of the Following Expenditures Will Qualify as a Research

question 107

Multiple Choice

Which of the following expenditures will qualify as a research expenditure for purposes of the research credit?

• A)An ice cream producer develops a new type of packaging that will keep ice cream frozen while driving home from the grocery store.
• B)An ice cream producer develops a new design on the package that will be more pleasing to the culture of a new market it is entering.
• C)An ice cream producer develops a new marketing campaign to introduce its brand to a new region of the country it is entering.
• D)All of the above qualify as research expenditures for the research credit.

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Definitions:

Natural Monopoly

A market situation where a single supplier can provide a good or service more efficiently than any potential competitor, often due to high initial setup costs.

Local Phone Company

A telecommunications company that provides phone services primarily within a local or regional area.

Making a Profit

The financial gain realized when the revenue gained from a business activity exceeds the costs, expenses, and taxes involved in sustaining the activity.

Breaking Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain.