Repeating that process again years two through five.
We get our accounts payable.
There's a typo.
Accounts.
We get our projected accounts payable series.
And we can put this all together, our cash inventory, accounts receivable and
accounts payable forecast to compute net working capital for each year.
Remember it's going to be cash plus inventory,
plus accounts receivable minus accounts payable.
That gets us our net working capital, but here's a question.
What happens to all this working capital here at the end of the project?
Specifically, what happens to all the cash that's sitting there, or
the inventory or the accounts receivable,
the customers from whom we're waiting to receive payment.
Or the accounts payable, the suppliers who are awaiting our payment?
What happens to all that net working capital?
Well, like physical assets, it doesn't just disappear, in fact most of
it is going to be recovered, not all of it and I'll explain why in just a second.
In particular, we're going to be able to recover the cash,
we're going to be able to recover some money from the inventory.
But by assumption, back in our forecast drivers,
we’re assuming we’re only getting 25 cents on the dollar, for this inventory.
That is probably obsolete, and either not worth much in terms of scrap, or
on some secondary market.
We’re going to have to pay, well excuse me, well we’re going to have to pay all of
our accounts receivable, but we’re also going to have to collect, sorry.
We’re going to have to, let's get rid of that, we're going to have to pay
our accounts payable and we're going to have to collect our accounts receivable.
The upshot of this is we're going to recover $51.375
million in net working capital at the end of the project.