The project has the following cash flows and salvage values and cost of capital 8%:

Year	Cash flows	Salvage
0	-5000	4000
1	2500	3500
2	3200	1800
3	1600	900
4	1000	0

What are the physical life and the economic life for this project? (Please write down the calculation process.)

• A.

  Physical life of this project is 4 years with economic life of 1 year.

• B.

  Physical life of this project is 3 years with economic life of 4 years.

• C.

  Physical life of this project is 4 years with economic life of 3 years.

• D.

  Physical life of this project is 4 years with economic life of 4 years.

• E.

  Physical life of this project is 4 years with economic life of 2 years.