Tsumagari Company, an electronics company in Kobe, Japan, is planning to buy new equipment to produce a new product. Estimated data are: 

Assume a 60 percent flat rate for income taxes. All revenues and expenses other than depreciation will be received or paid in cash. Use a 14 percent discount rate. Assume a 10-year straight-line depreciation for tax purposes. Also assume that the terminal salvage value will affect the depreciation per year. 

Compute 

1. Depreciation expense per year 

2. Anticipated net income per year 

3. Annual net cash flow 

4. Payback period 

5. Accounting rate of return on initial investment 

6. Net present value

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Cash cost of new equipment now Estimated life in years Terminal salvage value Incremental revenues per year Incremental expenses per year other than depreciation ¥165,000 ¥400,000 10 ¥ 50,000 ¥320,000