Accounting

Students should review the following statements and write 3–4 paragraphs that 

provide support for your answers:



1.	Managers should base pricing decisions on both cost and market factors. In 

addition, they must also consider legal issues. Describe the influence that the 

law has on pricing decisions.

2.	"It is impossible to use Discounted Cash Flow methods for evaluating 

investments in research and development. There are no cost savings to measure, 

and we don’t even know what products might come out of our R&D activities." 

This is a quote from an R&D manager who was asked to justify investment in a 

major research project based on its expected net present value. How would you 

respond to this statement? Do you agree or disagree? Explain.

 



 

•	If so, what points made you change your mind?

 

 

 



 





Grading Criteria	

Percentage



Describe the influence that the law has on pricing decisions.	

20%



How would you respond to the R&D manager’s statement about Discounted 

Cash Flow methods? Do you agree or disagree? Explain.	

20%



Supporting research/arguments made	

40%



Response to peer posts	

20