Working capital requirements: There will be an initial working capital requirement of $2,000,000 just to get production started. For each year, the total investment in net working capital will equal 10% of the dollar value of sales for that year. Thus, the investment in working capital will increase during years 1 through 3 , then decrease in year 4 . Finally, all working capital is liquidated at the termination of the project at the end of year 5 . The depreciation method: Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years. Working capital requirements: There will be an initial working capital requirement of $2,000,000 just to get production started. For each year, the total investment in net working capital will equal 10% of the dollar value of sales for that year. Thus, the investment in working capital will increase during years 1 through 3 , then decrease in year 4 . Finally, all working capital is liquidated at the termination of the project at the end of year 5 . The depreciation method: Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years