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22 August, 17:21

In order to convert the average annual net cash inflow from the asset back to the average annual operating income from the asset

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  1. 22 August, 17:45
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    If you know the average annual net cash flow and you want to know the average annual operating income, you must look for the annual depreciation expense and subtract it from the net cash flow.

    The formula for calculating net cash flows = operating income + depreciation expense

    therefore,

    operating income = net cash flows - deprecation expense
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