Research and Development Expense International Business Machines Corporation (IBM) reported the following on its 2018 form 10-K. 2018 2017 2016 $67,652 $67,268 $67,931 Total revenue Research, development and engineering expense 5,379 5,590 5,726 Number of new patents awarded 7,735 7,687 6,875 $ millions Required a. Calculate IBM's common-size research, development and engineering expense for each year. What pattern do we observe? Note: Round percentage to one decimal places (for example, enter 6.7% for 6.6555%). 2018 8% 2017 (NM:-8.3}% RD&E expense common-size RD&E Expense relative to sales has decreased + 2018 69.4% * 2016 RD&E per patent as a percentage RD&E spending per patent decreased ◆ ✓ b. Compute the research, development and engineering expense per new patent for each year. What pattern do we observe? Note: Round percentage to one decimal places (for example, enter 6.7% for 6.6555%). 8.4% ✔ over the years from 2016 to 2018. 2017 72.7% ✔ 2016 83.2% * over the years from 2016 to 2018.

Research and Development Expense International Business Machines Corporation (IBM) reported the following on its 2018 form 10-K. 2018 2017 2016 $67,652 $67,268 $67,931 Total revenue Research, development and engineering expense 5,379 5,590 5,726 Number of new patents awarded 7,735 7,687 6,875 $ millions Required a. Calculate IBM's common-size research, development and engineering expense for each year. What pattern do we observe? Note: Round percentage to one decimal places (for example, enter 6.7% for 6.6555%). 2018 8% 2017 (NM:-8.3}% RD&E expense common-size RD&E Expense relative to sales has decreased + 2018 69.4% * 2016 RD&E per patent as a percentage RD&E spending per patent decreased ◆ ✓ b. Compute the research, development and engineering expense per new patent for each year. What pattern do we observe? Note: Round percentage to one decimal places (for example, enter 6.7% for 6.6555%). 8.4% ✔ over the years from 2016 to 2018. 2017 72.7% ✔ 2016 83.2% * over the years from 2016 to 2018.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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