There does not really seem to be a consensus on this when reading each section. When given a few variables to find a return, should we just add them, or multiply them to get a compounded rate. For example Spending Rate = 8.5% Inflation = 2% Managing Costs = .4% Should we use a required return of 8.5 + 2 + .4 = 10.9% or 1.085*1.02*1.004 = 11.11% Different sections seem to do this different. On the exam can we just use either way?

I’ve read that either is appropriate.

when u do total return cal, it has to be multiplication. but i will do multiplication always just to be save.

singlesong80 Wrote: ------------------------------------------------------- > when u do total return cal, it has to be > multiplication. but i will do multiplication > always just to be save. i would do it in this way too.

one is additive model the other is mu,ltiplicative model