- CFA Exams
- CFA Exam: Level II 2021
- Study Session 7. Corporate Finance (1)
- Reading 19. Capital Budgeting
- Subject 7. Other income measures and valuation models
CFA Practice Question
Which equation(s) is (are) correct?
II. Economic income = Cash flow + (Ending market value - Beginning market value).
III. Economic income = Cash flow - (Beginning market value - Ending market value)
IV. Economic income = Cash flow - economic depreciation.
I. Economic income = Cash flow + Change in market value.
II. Economic income = Cash flow + (Ending market value - Beginning market value).
III. Economic income = Cash flow - (Beginning market value - Ending market value)
IV. Economic income = Cash flow - economic depreciation.
Correct Answer: All of them are correct.
Change in market value = economic depreciation.
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