The Franky company recently purchased a new delivery truck. The new truck cost $25,000, and it is expected to generate net after-tax operating cash flows, including depreciation, of $7,300 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 10%.

Year		Annual Operating Cash Flow		Salvage Value
0		-$25,000		$25,000
1		7,300		19,000
2		7,300		14,000
3		7,300		9,500
4		7,300		4,000
5		7,300		0

Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life?