Now that we have partially completed our sources and uses of funds, we can move on to our fixed asset analysis. So we're gonna be forecasting our PP&E and we're gonna be doing it in three steps. The first step is to forecast our gross PP&E. Then we're gonna be forecasting our depreciation. And finally we're gonna be forecasting the net PP&E. So let's begin with our gross PP&E. Of course, we start with a PP&E balance of 0. And in year one, our beginning balance is gonna equal last year's ending balance.

Now we're gonna add the construction CapEx. We're gonna take that from our operating assumptions all the way at the top, and that will be 100 for year one.

And we're also gonna add our maintenance CapEx also from our operating assumptions. And in year one, that will be 0. And the reason is that our maintenance CapEx is gonna kick in during the operational phase. So now we can calculate our ending gross PP&E as the sum of the beginning, PP&E, the construction CapEx and the maintenance CapEx. Let's take all four rows and copy them all the way until the end of the timeline in year eight. And here you can see how the construction CapEx is gonna be present in the first three years during the construction phase. And then our maintenance CapEx is gonna kick in during the operational phase.

Now let's look at our depreciation. We're gonna be actually depreciating each CapEx amount for each single year. Now for our cost construction phase, our construction CapEx is gonna start getting depreciated in the first operational year, and that'll be year four. So we can take the year one construction CapEx, we can lock that in, and then we can divide it by our depreciation period, which is an assumption if in our operating assumptions section at the top.

And that would be 20.

Let's make that number negative.

And let's move on to our year two construction CapEx. And the formula is gonna be quite similar, but instead of taking the year one CapEx, we'll take the year two CapEx. We locked that in, we divide it by the 20 year assumption at the top. We locked that in. And of course, again, we need to make this number negative. And finally, our year three construction CapEx depreciation. We're gonna start with a negative sign. We're gonna take the year three, Construction CapEx, locked that in and divided by 20.

Now we can take all three of this and copy them to the right across all five years. Now, typically you will need to be careful here and make sure that you don't over depreciate your CapEx, but in this case, the useful life of our CapEx is 20 years. And we only have a model with a five-year operational period. So that's not really a concern. Let's start looking our at our depreciation of the maintenance CapEx. So our maintenance CapEx kicks in in year four, which means we start depreciating our year four maintenance CapEx in year five. We're gonna take that year four maintenance CapEx of 30.

We lock that in and we divide it by the assumption of the life of this CapEx, which will be slightly different. In this case, it would be 10. Again, we need to make this number negative and we can move on to our next year, year five. But before that, let's copy this to the right.

So our year five maintenance CapEx of 30, we locked that in and we divided by our 10 year assumption. We locked that in and there you go we're gonna copy that, right? And we're gonna be doing this a couple more times now with our year six maintenance CapEx.

Lock that in, divided by our ten year assumption.

Lock that in until finally copy that, right? And we have one more, which is our year seven maintenance CapEx of 30. We locked that in and we divided by our 10 year assumption as well.

And there we go. Now of course, for our year eight depreciation, thus that falls outside our timeline. Since our year eight CapEx gets depreciated starting in year nine. So now we can compute our total depreciation here. I can do it for all years, starting in the construction year one phase. So we're gonna take the sum of and we will take every single depreciation line here. And that's of course gonna be 0 for the construction period, and it's gonna become negative during the operational phase.

Now we can take these depreciation numbers to build our net PP&E forecast. We start with an beginning, or in this case ending net PP&E of 0, which will be our beginning PP&E in the following year, year one. We're gonna be adding CapEx here, but we're gonna be adding both the construction CapEx as well as the maintenance CapEx. So we can take that all the way from our assumptions at the top. So that's gonna be 100 for our construction CapEx in year one and 0 for our maintenance CapEx in year one. And of course, that's gonna increase our PP&E. And now we take our depreciation off, or we're gonna lower our PP&E by the amount of depreciation, which of course in year one that is 0.

We can add these numbers to get our ending net PP&E. And finally, we can copy all four rows all the way until the end of the timeline in year eight to give us our forecast of our ending net PP&E.