Analyzing and Assessing Research and Development Expenses (LO2) Advanced Micro Devices, Inc. (AMD) and Intel Corp. (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 \(\mathrm{R} \& \mathrm{D}\) 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 $1,354 1,453 1,405 2012...... 2011... 2010...... ***... Sales INTC R&D Expense $5,422 2012...... $10,148 6,598 2011... 8,530 6,494 2010... 6,576 Sales $53,341 53,999 43,623