Economic Life - The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate after-tax operating cash flows, including depreciation of $6,250 per year. The truck has a 5 year expected life. The company'safter tax adjustments for the truck are below and cost of capital is 10%.

Year 0 : Operating Cash Flow = -$22,500, Salvage value = $22,500

Years 1-5 Annual Operating Cahs Flows = $6,250; Salvage Value: Year 1 = 17,500, year 2 = 14,000, year 3 = 11,000, year 4 = 5,000 and year 5 = 0.

what is the optimal number of years to operate the truck?

Would the introduction of salvage values, in addition to operating cash flows ever reduce the expected NPV and/or IRR of a project?