Explain in detail:

e. Crockett is also considering another project that has a physical life of 3 years; that is, the machinery will be totally worn out after 3 years. However, if the project were abandoned prior to the end of 3 years, the machinery would have a positive salvage (or abandonment) value. Here are the project's estimated cash flows: Year 0 1 2 3 Initial Investment and Operating Cash Flows $5,000 2,100 2,000 1,750 End-of-Year Net Abandonment Value $5,000 3,100 2,000 0 Using the 10% cost of capital, what is the project's NPV if it is operated for the full 3 years? Would the NPV change if the company planned to abandon the project at the end of Year 2? At the end of Year 1? What is the project's optimal (economic) life? Explain