Question: Expected Rate of Return ( % ) R&D ( $M ) Interest Rate Cost of Funds ( % ) 1 5 2 0 1 2

Expected Rate of Return (%) R&D ($M) Interest Rate Cost of Funds (%)1520121240129601268012310012
Refer to the data. At $40 million of R&D expenditures, the
Multiple Choice
marginal cost of R&D exceeds the marginal benefit.
interest-rate cost of funds is negative.
marginal benefit of R&D exceeds the marginal cost.
marginal cost of R&D equals the marginal benefit.

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