Question 2 (i) Explain why we prefer working with adjusted trailing P/E ratio than trailing P/E ratio. (ii) The following table reports Company Healing's R&D costs for 2010 to 2014 (in millions). In each year of the 2010-2014 period, its CFO capitalized the R&D cost and amortized the capitalized cost straight-line over the next ten years. However, according to the local accounting rule, only 40% of the R&D cost each year should be capitalized. Calculate the amount of the overstatement of income before tax for each year of the 2010-2014 period. 2012 2010 300 2011 400 2013 200 2014 300 R&D cost 350