Determining whether an expenditure should be expensed or capitalized is often difficult. Con- sider each of the following independent situations and indicate whether you would recom- mend that the cost be expensed or capitalized as an asset. Explain your answer. 1. Splash.com has spent $1.5 million for a 30-second advertisement to be aired during the Super Bowl. The ad introduces the company’s new Web-based product, and the com- pany expects the ad to increase sales for at least 18 months. 2. Chromosome.com has spent $8 million on research related to genetic diseases. The com- pany expects this research to lead to substantial revenues, beginning in the next year. 3. Catalog.com is an online catalog sales company. Catalog.com has just spent $5 million designing a targeted advertising campaign that will encourage regular customers of the company’s online catalog service to buy new products. 4. Food.com is an online seller of groceries. The company just spent $4 million building a new warehouse. The warehouse is expected to be useful for the next 15 years.