Question
Research and Development Expense International Business Machines Corporation (IBM) reported the following on its 2018 form 10-K. Required a. Calculate IBM's common-size research, development and
Research and Development Expense
International Business Machines Corporation (IBM) reported the following on its 2018 form 10-K.
Required
a. Calculate IBM's common-size research, development and engineering expense for each year. What pattern do we observe? Is this of potential concern to investors?
b. Compute the research, development and engineering expense per new patent for each year. What pattern do we observe? What flaw is there in this metric?
c. What other data might analysts and investors collect to form an opinion about the level and effectiveness of IBM's R&D endeavors?
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