With Regard to New Product Development, the Success of a New

question 2

Multiple Choice

With regard to new product development, the success of a new product:

• A) does not guarantee that additional low-cost brand extensions will be successful.
• B) does not allow a brand to leverage monies spent on the original product to successfully develop a new product.
• C) ensures quick development of other products in different product classes from the same brand.
• D) ensures low levels of interaction between functional areas of an organization.

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Definitions:

Invested Funds

Capital that has been placed into a project or company, with the expectation of generating income or profit.

Flotation Costs

The administrative cost of issuing new securities. Consists largely of commissions and marketing fees, but printing and engraving costs can also be significant.

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders.

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.