From those two scenarios, we realiz

From those two scenarios, we realized that both NPVs are negative and Linn will definitely make neither investment.
Since the new capsizes have 25 year life, what if we extend its service life from 15 years to 25 years.
So we use same data. The NPV is -$7,273,79.78 if the firm located in the U.S. while it is $368,557.29 when the firm located in Hong Kong. See exhibit 3 & 4.
Clearly, operating the new capsizes for 25 years, without tax, makes it a positive investments.
So OceanCarriers should construct a new capsize with on corporate tax and chartering the capsizes for its entire 25 year life.
If OceanCarriers chooses to adhere to their policy with a 15 year service life, the result will turn out to be a net loss on the investment.