Respuesta :
The average annual operating income from assets is $20,000.
What is operating income?
Earnings before interest and taxes is a measure of a company's profit that includes all income and costs (operating and non-operating) excluding interest and income tax charges. When a company does not have non-operating income or non-operating costs, operating income and operating profit are frequently used as synonyms for EBIT.
Equipment cost = $240,000
Cash inflow = $60,000
Total net cash inflows during the operating life of the equipment
= Cash inflow per year × no. of years
= $60,000 × 6
=$3,60,000
Total operating income during an operating life = Total net cash inflows during the operating life - Total depreciation during the operating life
= $360,000 - $240,000
= $120,000
Therefore,
Average annual operating income = [tex]\frac{Total operating income during an operating life}{Equipment operating life year}[/tex]
= [tex]\frac{120000}{6}[/tex]
Average annual operating income = $20,000
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