Suppose a firm anticipates that an R&D expenditure of $100 million will result in a new production process that will reduce costs and thus create a one-time added profit of $112 million a year later.The firm's expected rate of return is:

A) 0.12 percent.
B) 112 percent.
C) 12 percent.
D) 2 percent.

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Geetanjali Chugh · Accepted Answer

Final Answer : C, Explanation :  The expected rate of return is calculated by dividing the profit by the initial investment and then multiplying by 100 to get a percentage. Here, ($112 million - $100 million) / $100 million * 100 = 12%.

Suppose a firm anticipates that an R&D expenditure of $100 million will result in a new production process that will reduce costs and thus create a one-time added profit of $112 million a year later.The firm's expected rate of return is:

A) 0.12 percent.
B) 112 percent.
C) 12 percent.
D) 2 percent.

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Suppose a firm anticipates that an R&D expenditure of $100 million will result in a new production process that will reduce costs and thus create a one-time added profit of $112 million a year later.The firm's expected rate of return is:A) 0.12 percent.B) 112 percent.C) 12 percent.D) 2 percent.

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