Research and development

A business' lifeline is the quality and usability of its products or the efficiency and the degree of convenience of its services. Companies compete at each other to come up with the best product line or service in their field to stay on top and claim a bigger market share. This expense pays itself off when the product is a hit, just think about the current technologies you have right now. The reason behind such advancements in technology is the never-ending quest to profit on something, this involves competition.

Research and development expenses are used to improve a company's product line like modifying their headset product to be the best of its kind or finding ways to make an engine more fuel efficient which certainly is what the market demands for. All these improvements cost money which is reflected on this portion of the income statement

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