Cost Savings 176,000.00 176,000.00 176,000.00 176,000.00 Less Depreciation -115,000.00 -115,000.00 -115,000.00 -115,000.00 Taxable Income 61,000.00 61,000.00 61,000.00 61,000.00 Taxes -14,030.00 -14,030.00 -14,030.00 -14,030.00 Depreciation (add back) 115,000.00 115,000.00 115,000.00 115,000.00 Operating Cash Flow 161,970.00 161,970.00 161,970.00 161,970.00 Replace Working Capital* After Tax Salvage Project Cash Flows -495,000.00 161,970.00 161,970.00 161,970.00 161,970.00 Calculation of Depreciation: Depreciation = (Cost - Projected [not actual] salvage value)/ depreciable lif ( -575,000.00 0.00 )/5 -115,000.00 Calculation of After Tax Salvage Value Actual Salvage Value 60,000.00 Book Salvage Value 0.00 Taxable Salvage Value 60,000.00 Tax on Salvage -13,800.00 After Tax Salvage Value 46.200.00