G H 1 J B D E F 146 j. Optimal economic life: 147 Consider the LONG project above, now with an estimated salvage value if the project is terminated prematurely: 148 WACC= 12% 149 SALVAGE 150 TIME LONG VALUE 151 0 -350 350 152 1 65 310 153 2 75 280 154 3 85 200 155 4 60 265 156 5 95 200 157 6 105 115 158 7 125 0 159 160 Year 161 NPV Terminate @ Year 0 1 2 3 162 1 163 2 164 3 165 4 166 5 167 6 168 7 169 170 Optimal project life (Yr) = 4 5 6 7 G H 1 J B D E F 146 j. Optimal economic life: 147 Consider the LONG project above, now with an estimated salvage value if the project is terminated prematurely: 148 WACC= 12% 149 SALVAGE 150 TIME LONG VALUE 151 0 -350 350 152 1 65 310 153 2 75 280 154 3 85 200 155 4 60 265 156 5 95 200 157 6 105 115 158 7 125 0 159 160 Year 161 NPV Terminate @ Year 0 1 2 3 162 1 163 2 164 3 165 4 166 5 167 6 168 7 169 170 Optimal project life (Yr) = 4 5 6 7