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Question
During 2011, Lele Design earned net income of $250,000. The firm neither bought nor sold any capital assets. The book value of its assets declined by the year's depreciation charge of $200,000. The firm's operating cash flow for the year was $450,000. The market value of its assets increased by $300,000. What was Lele Design's economic income for the year? Why is this figure different from its accounting income? Please ignore taxes for this problem.
Answer
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Related questions
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