The optimal amount of R&D for a firm depends on the following, except
A)marginal cost of funds for R&D projects.
B)marginal benefit of R&D projects.
C)expected profitability of R&D projects.
D)amount of funds the firm currently has for R&D projects.

Question

Quizplus · Accepted Answer

The optimal amount of R&D for a firm is determined by comparing the marginal costs and benefits of R&D projects, as well as their expected profitability, rather than the current funds available for R&D. The decision should be based on the potential returns and costs of the projects, not the existing budget.

The Optimal Amount of R&D for a Firm Depends on the Following