The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. In a graph for determining the optimal R&D expenditure, the interest-cost of funds curve would be a(n)
A)upsloping line within the range $35M to $75M.
B)horizontal line at 24 percent.
C)upsloping line within the range 8 to 24 percent.
D)downsloping line within the range 24 to 8 percent.

Question

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. In a graph for determining the optimal R&D expenditure, the interest-cost of funds curve would be a(n)
A)upsloping line within the range $35M to $75M. 
B)horizontal line at 24 percent. 
C)upsloping line within the range 8 to 24 percent. 
D)downsloping line within the range 24 to 8 percent.

Quizplus · Accepted Answer

The Answer of  The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. In a graph for determining the optimal R&D expenditure, the interest-cost of funds curve would be a(n)
A)upsloping line within the range $35M to $75M. 
B)horizontal line at 24 percent. 
C)upsloping line within the range 8 to 24 percent. 
D)downsloping line within the range 24 to 8 percent.

The Table Shows the Expected Rate of Return, R&D Spending