keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. CVRX Ltd., one of the world's largest biotechnology companies, invests considerable amounts in research and development each year. In the most recent fiscal year (2020), the R&D expense was $500 million, the net income was $1,000 million, and the book value of equity was 58,000 million. The R&D expenses for the prior 3 years are as follows: $1,200 million (2019), 5900 million (2018), and 5600 million (2017) a) Would you expect the Free Cash Flows to the Firm (FCFF) of CVRX Ltd. to increase or decrease as a result of the capitalisation of the R&D expenses? Please explain briefly in the space provided below. (1 marks) b) Please explain below why the capitalisation of R&D expenses changes the reinvestment rate of CVRX Ltd. (2 marks) c) Assuming an amortizable life of 3 years, determine the amortization of capitalised R&D in cach of the R&D years, Please type your answer below. (4 marks) Amortization in 2020 - Amortization in 2019 - Amortization in 2018 - Amortization in 2017 - Page 5 of 1142 Words TE English TALIS d) Determine the total Value of Research Asset for CRVX and the R&D amortization expense for the current year. Please type your answer below. (2 marks) Value of Research Asset in 2020 - ...... e) Compute the Net Income, Book Value of Equity (BVE) and Return on Equity (ROE) of the firm before and after capitalising the R&D cxpenses. Please type your answer below. (3 marks) Net Income (before capitalisation) - . ............. Net Income (after capitalisation) - BVE (before capitalisation) ***** BVE (after capitalisation) - ROE (before capitalisation) ROE (after capitalisation) ............. ..I 1) If the WACC of CRVX Ltd. decreased to 10% after capitalising the R&D expenses, should the company continue investing in Research and Development? Please explain briefly in the space provided below