  We develop a complete analysis of a general entry-exit-scrapping model. In
particular, we consider an investment project that operates within a random
environment and yields a payoff rate that is a function of a stochastic
economic indicator such as the price of or the demand for the project's output
commodity. We assume that the investment project can operate in two modes, an
"open" one and a "closed" one. The transitions from one operating mode to the
other one are costly and immediate, and form a sequence of decisions made by
the project's management. We also assume that the project can be permanently
abandoned at a discretionary time and at a constant sunk cost. The objective of
the project's management is to maximise the expected discounted payoff
resulting from the project's management over all switching and abandonment
strategies. We derive the explicit solution to this stochastic control problem
that involves impulse control as well as discretionary stopping. It turns out
that this has a rather rich structure and the optimal strategy can take eight
qualitatively different forms, depending on the problems data.
