In the example, Q1 requires us to prepare an econ BS for AUE.
The answer in the textbook says
asset is 600 (fin asset as 200 and extend asset as 400)
liability is 495 (fin liability as 45 and extend asset as 450)
While economic net worth is the residual (i.e. 105).
My question is , why the contribution 10 m CAF to the University (a.k.a the 5% of 36-month moving average net asset) is not counted towards the liability part.
My desired answer:
asset is 600 (fin asset as 200 and extend asset as 400)
liability is 505 (fin liability as 45 and extend asset as 460)
While economic net worth is the residual (i.e. 95).
Moreover, for Q2 from the same example does it mean AUE and university hold real estate, then when real estate market become stressed, AUE is not in good position to support university operating support? If that's the case, why it is related to equity as well (because AUE invests in 100m domestic equity while I did not see university did that)
