I:14-56 Research Credit. Pharm Inc. is a small pharmaceutical company (organized four years ago) that is heavily involved in drug research. During the current year, Pharm Inc.

incurred the following expenditures related to the company’s research efforts:

Salaries of research scientists and technicians $180,000 Supplies and materials 162,000 Depreciation on research equipment 30,000 For the previous four years, Pharm Inc. had average gross receipts of $5,000,000. The company’s fixed-base percentage is 3%. Compute Pharm Inc.’s current year credit for research activities. Is Pharm Inc. entitled to claim any deduction for research and experimentation expenses for the current year?