incremental working capital

The revenue in the first year is 1308.75. So the working capital needed at the start of the first year - i.e. time 0 (now) is 10% x 1308.75 = 130.88 The revenue in the second year is 2817.26. So the working capital needed at the start of the second year (which is in one years time - i.e. time 1) is 10% x 2817.26 = 281.73. However we already have working capital of 130.88, so the extra needed at time 1 is 281.73 - 130.88 = 150.85 And so on.... :-)