As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

Question

Quizplus · Accepted Answer

Cutting spending on research and development (R&D) will likely result in immediate cost savings, thus increasing net income in the short term. However, over the long term, the lack of investment in R&D can hinder innovation and the development of new products or improvements, potentially leading to decreased competitiveness and lower net income in future periods.

As the Economy Becomes More and More Depressed,a Company's Management