Question: Calculate the depreciation expense for each year A U.S. based company wants to establish a subsidiary in Japan, use the following information. -The initial investment

Calculate the depreciation expense for each year

A U.S. based company wants to establish a subsidiary in Japan, use the following information.

-The initial investment is 100 million YEN

-The project is expected to last 5 years with a salvage value of 30 million YEN

-The prices, demand, and variable costs are as follows:

Year Price in YEN Demand (units) VC/unit in YEN

1 200 600,000 180

2 210 700,000 190

3 220 800,000 200

4 220 800,000 210

5 200 500,000 210

-Fixed costs in YEN are expected to be 10 million / year

-The company expects the NWC requirements as follows:

Initial NWC Investment of 30 million YEN

Annual NWC Requirements = 0 million YEN

Japan will impose a 25% tax on income

Depreciation expense is 10 years using the straight-line method

The Required Rate of return on the project is 15%

SHOW ALL CALCULATIONS/FORMULAS and using Excel is preferred :)

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