Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new...
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Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $ and it is expected to generate net aftertax operating cash flows, including depreciation, of $ per year. The truck has a year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is percent. Year Annual Operating Cash Flow Salvage Value $ $ What is the optimal number of years to operate the truck? Do not round intermediate calculations. Round your answers to the nearest whole number. years Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV andor IRR of a project? I. Yes. Salvage possibilities could only lower NPV and IRR. II Salvage possibilities would have no effect on NPV and IRR. III. No Salvage possibilities could only raise NPV and IRR. 
Economic Life
The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $ and it is expected to generate net aftertax operating cash flows, including depreciation, of $ per year. The truck has a year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is percent.
Year Annual Operating Cash Flow Salvage Value
$ $
What is the optimal number of years to operate the truck? Do not round intermediate calculations. Round your answers to the nearest whole number.
years
Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV andor IRR of a project?
I. Yes. Salvage possibilities could only lower NPV and IRR.
II Salvage possibilities would have no effect on NPV and IRR.
III. No Salvage possibilities could only raise NPV and IRR.
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