Abstract
The 662 firms of manufacturing have already been studied on ex post evaluation of returns on machinery and software (M/S) investments. However, the return on research and development (R/D) expense, being often larger than M/S investment, has not been studied. Especially, the study on R/D is not avoidable for medicine manufacturing firms having huge R/D expense. Then, the 2 variable model of M/S investment is expanded 3 variable model, adding R/D expense. The 29 major firms of medicine manufacturing have been studied based on the extended model and the average success rate of medicine R/D projects, while the extended model is also studied on the propriety of itself.
