Referring to CFAI mock 2011, question 2A here:
We are looking for the after-tax nominal rate of return which = required cash flow / investable base.
For the required cash flow we have: company pension of 48k, living expenses of USD257.5k, annual mortgage payments (principal + interest) of USD225k.
In the answer cash flow is noted as: company pension – living expenses = - 209.5k. Why is the annual mortgage payment not included in cash flow? So why not company pension - living expenses - annual mortgage payments = -434.5k