Reference no: EM132656392

Zif Software is a firm with significant research and development expenses. In the most recent year, the firm had $100 million in research and development expenses. R&D expenses are amortizable over 5 years and the R& D expenses over the last 5 years are as follows:

Year R&D expenses

-5 $ 50 million

-4 $ 60 million

-3 $ 70 million

-2 $ 80 million

-1 $ 90 million

Current year $ 100 million

Assuming a linear amortization schedule (over 5 years), estimate

a. the value of the research asset.

b. the amount of R&D amortization this year.

c. the adjustment to operating income.