1. In its most recent year, HiFlyer Plcs return on capital was 50% on the reported invested capital of $2 billion. An analyst decides to treat Research and Development expenditure as capital expenditure and estimates the value of the research asset to be $1 billion. The Research and Development expenditure was $300 million and the amortisation of the research asset was $200 million. There is no tax. a. Re-estimate the return on capital of HiFlyer. b. Do you agree with the analysts decision to treat R&D expenses as capex? Give reasons for your answer