Advanced Micro Devices ( AMD) and Intel (INTC) are competitors in the computer processor industry Following is a table ( \(\$\) millions) of sales and R\&D expenses for both companies.

a. What percentage of sales are AMD and INTC spending on research and development?

b. How are AMD and INTC's balance sheets and income statements affected by the accounting for R\&D costs?

c. How can one evaluate the effectiveness of \(R \& D\) spending? Does the difference in \(R \& D\) as a percentage of sales necessarily imply that one company is more heavily invested in R\&D? Why might this not be the case?

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AMD R&D Expense Sales INTC R&D Expense Sales 2005..... $1,144 $4.972 2005...... $5,145 $38,826 2006 1,205 5.649 2006. 5,873 35,382 2007. 1,847 6,013 2007 5,755 38,334