• Microsoft Corporation incurred $800 million in marketing expenses and $600 million in R&D expenses during the year. The company reported the following financial figures:
  • Total Revenue: $143 billion
  • Operating Income: $52 billion
  • Net Income: $44 billion

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