Siago Pharmaceuticals is a mature company whose R&D Expenses have decreased from $400 million five years ago to $200 million in the most recent year. The company reported operating income of $500 million in the most recent year. If you capitalize R&D expenses, which of the following would you expect to see happen to your adjusted numbers?

a. Operating income will increase, FCFF will decrease

b. Operating income will decrease, FCFF will decrease

c. Operating income will increase, no change in FCFF

d. Operating income will decrease, no change in FCFF

e. Operating income will increase, FCFF will increase

f. Operating income will decrease, FCFF will increase

Answer rating: 100% (QA)

Solution We consider no Tax and No depreciationamortization for the given si... View the full answer