With respect to a research and development (R&D)program,which of the following can be considered the exercise price?
A) The cost of the R&D program
B) The cost of future investment required to capitalize on the R&D program
C) The returns to the R&D investment
D) The returns to the R&D investment minus the cost of the R&D program

Question

Quizplus · Accepted Answer

The exercise price refers to the cost of future investment required to capitalize on the R&D program. It is the amount that needs to be paid in order to obtain the benefits of the R&D investment. Option A refers to the total cost of the R&D program, which is not the exercise price. Option C refers to the returns from the R&D investment, which are not the exercise price. Option D subtracts the cost of the R&D program from the returns, which is not the exercise price either.

With Respect to a Research and Development (R&D)program,which of the Following