The third decision to be considered involves a fleet of trucks with an engineering life of three years (that is, the trucks will be totally worn out after three years). However, if the trucks were taken out of service, or "abandoned" prior to the end of three years, they would have a positive salvage value. Here are the estimated net cash flows for each truck:

Initial Investment and Operating End- of- Year Net Abandonment Cash Flow Cash Flow $20.000 $ 8. 40 0 $12, 40 0 ` AFIM 7,000