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Here is a quote from the WSJ article linked in the prior question on Meta Platforms (formerly Facebook). Facebook is already investing heavily in creating

Here is a quote from the WSJ article linked in the prior question on Meta Platforms (formerly Facebook).

Facebook is already investing heavily in creating that new reality of shared online spaces inhabited by digital avatars, with projects ranging from virtual-reality glasses to an e-commerce platform. "We expect to spend many billions of dollars for years to come," Mr. Zuckerberg said.

Much of the kind of investment discussed in this article involves research and development for new products that utilize the metaverse. As we learned in chapter 8 of the Wild textbook, research and development costs are not capitalized on the balance sheet as assets. Rather, they are expensed on the income statement as incurred. Given the expectation of spending billions on these new products, what is Mr. Zuckerberg's primary motive (assuming he and Facebook executives are rational people)?

Question 5 options:

1)

Zuckerberg's primary purpose for announcing investments in the metaverse is to trick shareholders and drive up the stock price.

2)

Zuckerberg's primary purpose is to avoid paying income taxes, by spending a lot of money on research and development.

3)

Zuckerberg primarily predicts, that the future cash inflows, from the sale of products related to the metaverse, will significantly exceed the present cash outflows, which will in turn, increase the value of the company.

4)

Zuckerberg's primary purpose is to employ over 10,000 people in high paying jobs related to the metaverse.

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