RadioheadIncpurchased a new plastic tree making plant. The new truck cost $30,000, and it is expected to generate net after-tax operating cash flows, including depreciation, of $8,500 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The companys cost of capital is 12%.What isthe project's optimal economic life?

YearAnnual Operating Cash FlowSalvage Value

0 ($30,000) $30,000

1 8,500 20,000

2 8,500 19,000

3 8,500 15,000

4 8,500 7,000

5 8,500 0