Among intangible assets, R&D has received special attention on the part of financial analysts as it helps describe the effort of the firm to be innovative and build its future competence. Which...

Among intangible assets, R&D has received special attention on the part of financial analysts as it helps describe the effort of the firm to be innovative and build its future competence. Which ratio(s) is (are) often used in such evaluation? (a) R&D intensity ¼ R&D expenses/Sales (b) R&D per employee ¼ R&D expense/number of employees (c) Annual growth rate of R&D ¼ [(R&D expenses year 2 – R&D expenses year 1)/R&D expenses year 1] (d) All of these. (no amortization, amortization, impairment, immediate write-off). 3 Research and development costs. Discuss the choice between capitalization versus expensing or R&D costs.