The Scampini Supplies Company recently purchased a new delivery truck. The new truck has an after-tax cost of $21,500, and it is expected to generate after-tax cash flows of $6,500 per year. The truck has a 5-year expected life. The expected year-end abandonment values (after-tax salvage values) for the truck are given below. The company's WACC is 13%.

				After-Tax
Year	Annual After-Tax Cash Flow			Abandonment Value
0	($21,500)			-
1	6,500			$17,500
2	6,500			13,000
3	6,500			11,000
4	6,500			7,000
5	6,500			0

1. What is the truck's optimal economic life? Round your answer to the nearest whole number.

   year(s)

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

   -Select-YesNoItem 2