=+The accounts department has produced budgeted profit and loss statements for each of the next five years for the project. At the end of the fifth year the capital equip-

ment will be sold and production will cease. The capital equipment is expected to be sold for scrap on 31.12.20X5 for 40,000.

Year end Year end Year end Year end Year end 31.12.20X1 31.12.20X2 31.12.20X3 31.12.20X4 31.12.20X5 Sales 400 400 400 320 200 Materials 240 240 240 192 120 Other variable costs 40 40 40 32 20 Overheads 20 20 24 24 24 Depreciation 40 40 40 40 40 Net profit/(loss)
60 60 56 32 (4)
(All figures in £000s)