Steele Industries has a lot of Research and Development (R&D) expenses each year. The company estimates...
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Steele Industries has a lot of Research and Development (R&D) expenses each year. The company estimates that the value of each year's R&D expenditures lasts for two years. The company wants to perform an EVA analysis on the results of 2021 to eliminate the accounting distortions regarding R&D costs. As previously stated, the company believes the value of R&D costs lasts for two years, so 50% of the value of R&D costs for a single year is used up in that year and then the other 50% is used up in the subsequent year. Assume that all R&D costs are spent at the beginning of the year. In 2020, the company spent $500,000 in R&D. In 2021, the company spent $400,000 in R&D. In 2021, Net Income on the Income Statement was $800,000. In the company's EVA analysis, what will Adjusted Income be? O $800,000 Steele Industries has a lot of Research and Development (R&D) expenses each year. The company estimates that the value of each year's R&D expenditures lasts for two years. The company wants to perform an EVA analysis on the results of 2021 to eliminate the accounting distortions regarding R&D costs. As previously stated, the company believes the value of R&D costs lasts for two years, so 50% of the value of R&D costs for a single year is used up in that year and then the other 50% is used up in the subsequent year. Assume that all R&D costs are spent at the beginning of the year. In 2020, the company spent $500,000 in R&D. In 2021, the company spent $400,000 in R&D. In 2021, Net Income on the Income Statement was $800,000. In the company's EVA analysis, what will Adjusted Income be? O $800,000
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