The formula to calculate the Annual Incremental Earnings (E) is:
\[ E = I \times Y \]
Where:
Annual incremental earnings refer to the additional earnings generated each year over a specified period. This metric is often used in financial analysis to assess the growth in earnings due to specific investments, strategies, or changes in business operations. By understanding annual incremental earnings, businesses can make informed decisions about future investments and strategies to maximize profitability.
Let's say the incremental earnings (I) are $5,000, and the number of years (Y) is 3. Using the formula:
\[ E = 5000 \times 3 = 15000 \, \text{dollars} \]
So, the annual incremental earnings (E) are $15,000.
