Which of the following is true about investment in research and development? A)

Question

Which of the following is true about investment in research and development?

A) The option side of R&D investments is not related to real options. B) Companies are unable to increase or decrease resources committed to a project based on how

successful it has been. C) Distant payoffs from R&D investments are more uncertain than other investments. D) In the pharmaceutical industry, R&D projects are not regarded as important strategic

investments. E) R&D investments are never staged.

Explanation / Answer

Option C is correct. Payoff of doing R&D investments are more uncertain than other form of investments.

Option A is incorrect as R&D investments are not options.

Option B is incorrect as companies can change investments in R&D based on how succesfull they are.

Optino D is incorrect as R&D projects are most critical projects for pharmaceutical industry.

Option E is incorrect too

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