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Lightly grease a 2 quart casserole baking dish. Spread apples in prepared dish. Sprinkle with 1/2 cup of the walnuts. In a small bowl, stir together 1/4 cup of sugar and 1/2 teaspoon of cinnamon, sprinkle over apples. In a medium mixing bowl, stir together flour, 1/2 cup of sugar, and baking powder. In a small mixing bowl, combine the egg, evaporated milk and melted butter or margarine. Stir into flour mixture until smooth. Pour evenly over apples, sprinkle with remaining walnuts. Bake in a 325ºF.  oven for 50 - 55 minutes or until a wooden toothpick inserted in the center comes out clean. To serve, cut into squares. Serve warm. If desired, top with whipped cream or ice cream and sprinkle with additional cinnamon. Makes 9 servings