QUESTION 13: Gfizer, the world's largest research-based pharmaceutical company, invests considerable amounts in research and development each year. In the most recent fiscal year 2012, the R&D expense was $5,101m. The net income for Gfizer was $2,000m and the book value of Equity was $6,000m. The R&D expenses for the prior 5 years are as follows: S1,000m (2011), S1,500m (2010), S1,600m (2009), $1,800m (2008), S1,900m (2007). (a). Assuming an amortizable life of 5 years, determine the amortization of capitalised R&D in each of the previous 5 years; (b). Determine the Value of Research Asset for Gfizer and the R&D amortization expense for the current year, (c). Compute the Return on Equity (ROE) for Gfizer before and after capitalising the R&D expenses