Abandonment option The Scampini Supplies Company recently purchased a new delivery truck. The new truck costs $22,500, and it is expected to generate after-tax cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected year-end abandonment values (salvage values after tax adjustments) for the truck are given below. The company's WACC is 10%. Year Annual After-Tax Cash Flow Abandonment Value 0 $-22,500 - 1 6,250 $17,500 2 6,250 14,000 3 6,250 11,000 4 6,250 5,000 5 6,250 0 a. What is the truck's optimal economic life? year(s) b. Would the introduction of abandonment values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project? Explain.