Life of the project (Years) = 10 Number of new boxes = 4 Annual incremental revenue per box = $400,000 Number of new seats = 5,000 Annual incremental revenue per seat = $2,500 Incremental expense (% of revenue) = 60% Construction cost (Cap exp) = $10,000,000 Depreciation per year = $1,000,000 D&A = Cap Exp/Depreciable life of the investment = $10,000,000/10 = $1,000,000 Additional working capital in Year 0 (Add WC) = $1,000,000 No more working capital will be required during the project life. Working capital will be recovered in year 10 = ($1,000,000) Tax rate = 30% Cost of capital = 10%