The correct answer is C. economic life.
The economic life of an asset is the period of time over which it generates net cash flows. It is the longest period of time for which the asset is expected to be profitable. The economic life of an asset is determined by a number of factors, including the asset’s physical and economic condition, the level of maintenance and repairs required, the availability of replacement parts, and the technological obsolescence of the asset.
The minimum life of an asset is the shortest period of time over which it must be used in order to comply with environmental regulations or other legal requirements. The present value life of an asset is the period of time over which the asset’s net present value is positive. The transaction life of an asset is the period of time during which the asset is owned by the company.
The economic life of an asset is the most important factor in determining the optimal time to dispose of an asset. The economic life of an asset is typically shorter than its physical life, as assets are often disposed of before they reach the end of their physical life due to technological obsolescence or changes in market conditions.