=+Depreciation of fixed capital items in each of the first two years is £2m. In each of the next three years it is £3m. This has been deducted before arriving at the profit figures shown above. In years 1, 2 and 3 capital expenditure will be £5m per year which both replaces worn-out assets and pays for fresh investment to grow the business. In the fourth and fifth year capital expenditure will be £3m.