Please explain, how would you account for the $2 million (item #12 on page 4) that New Balance spent in the R&D of Sneaker 2013? And why?

9. Selling, general, and administrative expenses were expected to be $3! million per year. 1o. Kirani James would be paid 52 million per year fer his endorsement of Sneaker 2013, with an additional $1 million Olympic bonus in 2o 16. 11. Other advertising and promotion costs were estimated as follows: A&P Expense {millions} $3o $25 $15 12. New Balance had already spent $2 million in research and development on Sneaker 2o13. 13. The Sneaker 2o13 project was to be nanced using a combination of equity and debt. The interest costs on the debt were expected to be approximately 51.2 million per year. The New Balance discount rate for new projects such as this was 11%. 14. New Balance's effective tax rate was 4o%