Tezla Pharmaceutical is a firm with significant R&D expenses. The firm had $1,250 million in...
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Tezla Pharmaceutical is a firm with significant R&D expenses. The firm had $1,250 million in R&D expenses and reported $2,000 million in operating income in the current year. R&D expenses are amortizable over four years following a straight-line amortization schedule. The R&D expenses in the past four years are as follows:
| Year | R&D Expenses (in million dollars) |
| Current | 1250 |
| -1 | 980 |
| -2 | 810 |
| -3 | 660 |
| -4 | 470 |
Answer the following three questions. Please show your work, e.g., formulas, Excel functions, and input used in formulas and Excel functions.
a. (1 point) What is the amount of R&D amortization in million dollars this year?
b. (0.5 point) What is the value of research asset in million dollars?
c. (0.5 point) What is the adjusted operating income in million dollars?
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