The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $$22,500,$ and it is expected to generate net after$-$tax operating cash flows, including depreciation, of $$6,250$ per year. The truck has a $5-$year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is $9$ percent.

Year $0$: Annual operating cash flow of $($$$22,500)$ and Salvage value of $$22,500.$

Year $1$: Annual operating cash flow of $$6,250$ and Salvage value of $$17,500.$

Year $2$: Annual operating cash flow of $$6,250$ and Salvage value of $ $14,000.$

Year $3$: Annual operating cash flow of $$6,250$ and Salvage value of $ $11,000.$

Year $4$: Annual operating cash flow of $$6,250$ and Salvage value of $ $5,000.$

Year $5$: Annual operating cash flow of $$6,250$ and Salvage value of $ $0.$

$1.$What is the optimal number of years to operate the truck?

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

$-$ No$.$ Salvage possibilities could only raise NPV and IRR.

$-$ Yes. Salvage possibilities could only lower NPV and IRR.

$-$ Salvage possibilities would have no effect on NPV and IRR.