Accounts and finance

Table of Contents

1. Topic pack - Accounts and finance - introduction
2. 3.1 Sources of finance - notes
3. 3.1 Sources of finance - questions
4. 3.2 Investment appraisal - notes
5. Investment appraisal
6. 3.2 Investment appraisal - questions
7. 3.3 Working capital - notes
8. 3.3 Working capital - questions
9. 3.4 Budgeting - notes (HL only)
10. 3.4 Budgeting - questions
    1. Types and purposes of budgets - short answer questions
    2. Variance analysis - short answer questions
    3. Variance analysis - case study
    4. Budgeting for R&D
    5. Budgeting for advertising
11. 3.5 Final accounts - notes
12. 3.5 Final accounts - questions
13. 3.5 Final accounts - simulations and activities
14. 3.6 Ratio analysis - notes
15. 3.6 Ratio analysis - questions
16. 3.6 Ratio analysis - simulations and activities
17. Printable version

Budgeting for R&D

Read the article Tough Times Spur Shifts in Corporate R&D Spending and then have a go at the questions below. You can either read the article in the window below, or follow the previous link to open the article in a new window.

Question 1

Define the term 'Research and Development' (R&D).

Question 2

Explain why firms may reduce their R&D budgets in a recession.

Question 3

Examine the reasons why '... 232 companies in the Standard & Poor's 500 index for which data were available increased their aggregate research and development expenditures to $163.37 billion in 2008 and $166.42 billion in 2009 from $154.44 billion in 2007'.

Question 4

Discuss the reasons why large pharmaceutical companies such as GSK and Pfizer are cutting their R&D budgets.