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Unformatted text preview: $- $400,000 $400,000 $384,000 $352,000 $304,000 Plus: CAPEX 400,000 80,000 80,000 80,000 80,000 80,000 Less: Depreciation Expense for the Year- (80,000) (96,000) (112,000) (128,000) (144,000) Net Fixed Assets (end of the year) $400,000 $400,000 $384,000 $352,000 $304,000 $240,000 Plus: Additional Depreciation (Note1) Less: New working capital needs (Note 2) Plus: Salvage value of the fixed assets in year 5 (assumed to equal its book value) (Note 3 Note 2: At the end of year 5 the total investment in working capital is returned to the firm in an amount equal to its book value. Note 3: We define the terminal value of the project's fixed assets as the net fixed asset balance at the end of year 5. Note 1 : CAPEX of each year is depreciatied starting from the following year and each year one-fifth of the previous year's CAPEX is added....
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- Spring '11