life cycling .

The following statements relate to the justification of the use of life cycle costing:

1)Product life cycles are becoming increasingly short.This means that the iniitial costs are an increasingly important component in the product’s overall costs

2)Product costs are increasingly weiighted to the start of a product’s life cycle, and to properly understand the profitability of a product these costs must be matched to the ultimate revenues

3)The high costs of (for example) research, design and marketing in the early stages in a product’s life cycle necessitate a high initial selling price

4)Traditional capital budgeting techniques do not attempt to minimise the costs or maximise the revenues over the product life cycle

the right answer is 1,2 & 4

why 3 is not right? we need high prices to cover the early stages costs