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The Scampini Supplies Company recently purchased a new delivery truck. The new truck costs $25,000, and it is expected to generate after-tax cash flows, including

The Scampini Supplies Company recently purchased a new delivery truck. The new truck costs $25,000, and it is expected to generate after-tax cash flows, including depreciation, of $6,500 per year. The truck has a 5-year expected life. The expected year-end abandonment values (salvage values after tax adjustments) for the truck are given below. The company's WACC is 11%.

Year Annual After-Tax Cash Flow Abandonment Value
0 ($25,000) -
1 6,500 $20,000
2 6,500 15,500
3 6,500 13,500
4 6,500 7,500
5 6,500 0

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

year(s)

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