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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
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 years depreciation charge of $200,000. The firms operating cash flow for the year was $450,000. The market value of its assets increased by $300,000. Based only on this information, what was Lele Designs economic income for the year? Why is this figure different from its accounting income? Please ignore taxes for this problem.
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