As the paper outlines,the relevant cash flows include: the initial cash outlay, in the case of Paddle Your Own Canoe Plc, this amounts to 5,150,000 (see Figure 1 in Appendices) in the form of investment in plant and machinery as well as the additional working capital. the annual operating cash flows, which is derived by getting the net income of the operations then adding back the depreciation expenses. and the terminal cash flow, in the case of the company, this amounts to 1,775,000 (see Figure 1 in Appendices)—the sum of the estimated salvage value of the initial investment and the recovery of working capital at the end of the project. The initial outlay does not include the investment in the initial development which amounts to 750,000 (see Figure 1 in Appendices). What is included are the estimated cost of building the plant and machinery which amounts to 4,250,000 (see Figure 1 in Appendices), as well as the additional investment in working capital in order to run the plant, which amounts to 900,000 (see Figure 1 in Appendices). Another thing to note is that the investment in working capital occurs in two years, the 900,000 in 2009, and the 450,000 in 2010 (see Figure 1 in Appendices). The 450,000 in 2010 is added to the operating cash flows in 2010 and discounted back in order to provide a more accurate analysis. After the initial outlay, the cash flows from operations are determined. This can be done by looking at the schedule provided in the case, solving for the annual revenues by multiplying the projected annual sales volume, as well as the price (see Figure 1 in Appendices): in 2010, this amounts to 8,000,000. 2011, this figure is 8,800,000. 9,600,000 in 2012. 7,200,000 in 2013. and 6,000,000 in 2014, respectively.