Depreciation expense = (100 * (1-5%))/5 =190,000 yuan.
(1) Net cash flow = sales revenue-cash cost-income tax = net profit+depreciation =20 (because tax is not considered)+19 = 390,000 yuan.
Annual net cash flow = 390,000 yuan.
(2) payback period of investment = initial investment/annual net cash flow = 100/39=2.56 years, which is about three years.
(3) Average rate of return = annual net cash flow/initial investment =39/ 100=39%.
I think this is the right thing to do. I hope it helps you, hehe ~ ~
Come on ~ ~