During 2011,Lele Design Earned Net Income of $250,000

question 29

Essay

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.Based only on this information,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.

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Definitions:

Apprehension

A feeling of anxiety or fear that something bad or unpleasant will happen.

Assault

An intentional act that causes another person to fear imminent bodily harm or offensive contact.

Offensive Bodily Contact

An intentional act by one person that creates an apprehension in another of an imminent harmful or offensive contact.

Negligent Torts

Legal claims arising from acts or failures to act where a duty of care is owed and breached, resulting in injury or damage to another party.