1. An asset costs $165,000 and will generate cash benefits of $42,000 at the end of each year for six years. Salvage values are $75,000, $50,000, $40,000, $30,000 and $10,000 at the end of years 2, 3, 4, 5 and 6 respectively. The required return is 7 percent. Assuming that this asset can be replicated.

Equivalent annuity if abandoned after 6 years ______________

Equivalent annuity if abandoned after 5 years ______________

Equivalent annuity if abandoned after 4 years ______________

Equivalent annuity if abandoned after 3 years ______________

Equivalent annuity if abandoned after 2 years ______________

When is the optimal time to abandon the investment?