CFA CFA Level 1 CFA level1 Financial Analysis Section, Understanding Cashflow Statements

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CFA level1 Financial Analysis Section, Understanding Cashflow Statements

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  • This topic has 2 replies, 2 voices, and was last updated Jun-21 by chen2196.
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      Hi

      Here is an example used in CFA textbook that I don’t understand.

      The explanation in the question used the first column(“12/31/2018”) as beginning balance and second column(“12/31/2017”) as ending balance and arrived at the answer B. I don’t understand why it used earlier time as ending balance and later time as beginning balance, aren’t you supposed to go the opposite way? I used first column as ending balance and second column as beginning balance and got the cash received from equipment sale as $22million. Can someone tell me who’s wrong here? Thank you very much!

      Zee Tan voted upchen2196 voted upmikey voted up
    • Zee Tan
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      You are correct, the dates of the columns should be swapped. The errata of CFA Level 1 states:

      In the table in Example 6 (page 206 of print), the second column heading should be
      12/31/2017, and the third column heading should be 12/31/2018.

      You can find the full errata for CFA Level 1 here.

      Zee Tan voted up
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