• Microsoft Corporation incurred $5 billion in research and development (R&D) expenses during the year. The company reported the following financial figures:
  • R&D Expenses: $5 billion
  • Total Revenue: $150 billion
  • Operating Income: $50 billion
  • Net Income: $40 billion

• Requirements:
  1. Calculate Microsoft's operating profit margin after accounting for R&D expenses.
  2. Prepare a comparative income statement showing the impact of R&D expenses on net income.
  3. Analyze the strategic benefits of investing in R&D for Microsoft.
  4. Discuss the classification of R&D expenses in Microsoft's financial statements.
  5. Evaluate the impact of R&D investments on Microsoft's innovation and market competitiveness.