New truck costs 22500

xash flow of 6250 per year

5 year expected life

coat of capital 8 %

salvage values for years 0-5 (22500, 17500, 14000, 11,000, 5000, 0)

what is optimal number of years to operate truck? do not round intermediate calculations, round answer to nearest whole number.

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

i) salvage possibilities would have no effect on npv and irr

ii) No. dalvage possibilities could only raise npv and irr

iii) Yes. Salavge possibilities could only lower npv and irr

Pick one

veart