A business is considering starting a new project. If the project starts, it will be

necessary to procure a machine that is costed at NOK $600,000.$ The

decommissioning value depends on when the project ends, but the technical lifetime

is six years. The following cash flow is budgeted for different lifetime options:

The required rate of return is $15\%.$

A$.$ What is the economic life of the project if it is not to be repeated?

B$.$ Now suppose that the project is an investment chain to be reacquired

indefinitely. How often should the machine be replaced with a new one?