Which of the following statements is true about a firm with a long development cycle time?
A) It can quickly revise or upgrade its product offering.
B) It is more likely to have a high cost of capital.
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 long development cycle time often means that a firm's investments are tied up for longer periods before generating revenue, which can lead to a higher cost of capital due to the increased risk and time value of money.

Which of the Following Statements Is True About a Firm