1. When we immediately expense the capital investment instead of depreciating over time, how does this affect the Capital Budgeting problem ? Does it mean that the depreciation for this will be 0 and subtract the cost of the asset from the income ? Please help me in understanding how this works.
2. A stock has annual returns of 7 percent, 15 percent, -6 percent, and 3 percent for the past four years. Calculate the arithmetic average and the geometric average of these returns. Show your work.