In the reading on Residual Income, in the CFAI exercise problems, in problem no 10. B, under the solution, they have calculated ending BV by only adding the net income and deducting dividends, whereas in problem no 11 solution, they have calculated ending book value by adding residual income also. The answers will obviously be different. Why this difference?
Okay, I just noticed that in the solution for Q no 11, the beginning book value in 2012 is given as 43.92 whereas the ending book value in year 2009 is 36.30. Isn’t this incorrect?