Which of the following is typically true regarding a firm with a long development cycle time?
A) It can quickly revise or upgrade its product offering.
B) Its cost of capital will increase.
C) It can take advantage of both first-mover and second-mover advantages.
D) It is more likely to be able to fully amortize the fixed costs of development before that generation becomes obsolete.

Question

Quizplus · Accepted Answer

A firm with a long development cycle time often faces increased risk and uncertainty, leading to a higher cost of capital as investors demand a higher return for the increased risk.

Which of the Following Is Typically True Regarding a Firm