According to the terminology used in Chapter 2, is depreciation a cash expense or a non-cash charge? What is the difference between these two concepts?

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At the risk of oversimplifying, we will use the following terminology in this book: the financial manager or chief financial officer (CFO) is responsible for financing the firm and acts as an intermediary between the financial system's institutions and markets, on the one hand, and the enterprise, on the other; the business manager invests in plant and equipment, undertakes research, hires staff and sells the firm's products, whether the firm is a manufacturer, a retailer or a service provider; the financial investor invests in financial securities. More generally, the financial investor provides the firm with financial resources, and may be either an equity investor or a lender.