Research and development

During the year ended 31 December 20X4, Bloop Co incurred expenditure on two projects Project 1 costs relate to the evaluation of alternatives for improved production systems to be implemented during 20X5 and 20X6. The company spent $1m on related salaries and materials and $2m on design equipment (which had an expected life of four years). Project 2 involves the testing of a new product which will be introduced to the market in 20X5 and is expected to generate profits over a four-year period. The company spent $4m on salaries and materials. The policy is to charge a full year’s depreciation on assets. What is the TOTAL charge to profit or loss for the year ended 31 December 20X4? The answer is 1.5 mil (1+ 2/4) My question is why have they capitalized the design equipment and depreciated it (2/4) isn't it research expenditure too and should fully expensed to p/l?