Aglent Technologies, Inc., the high-tech spin-off from Hewlett-Packard Company, reports the following operating profit for 2018 in its 10-K ($ millions):

Net revenue

Products ........................................................     $3,746

Services and other ........................................      1,168

Total net revenue .........................................        4,914

Costs and expenses

Cost of products ................................................  1,588

Cost of services and other ...............................    639

Total costs ..........................................................   2,227

Research and development ..............................  385

Selling, general and administrative ..................  1,374

Total costs and expenses ..................................   3,986

Income from operations ................................      $ 928

REQUIRED:

a. What percentage of its total net revenue is Agilent spending on research and development?

b. How are its balance sheet and income statement affected by the accounting for R&D costs?

c. In 2003, Agilent's spending on R&D was $ 1,051 million- 17.4% of its total net revenue. What are some possible ways that the company might have reduced its R&D intensity from 2003 to 2018? What are some of the possible implications for the company?