Abstract
For the economic evaluation of investment projects, it is necessary to estimate the economic life of the equipment accurately. However, the previous studies of this problem haven't dealt explicitly with the effect of the cash outflow relating to taxes. In the economic evaluation, the corporate income taxes and municipal property tax must be considered. The object of this paper is to construct the after-taxes economic life model with the like-for-like replacement. We can get the findings that, for the estimation of the economic life, it isn't absolutely necessary to consider the cash outflow relating to taxes, when capital cost isn't high. But we leave taxes out of consideration, we may make the accept/reject decision wrong.
