Useful Life Is Expressed in Terms of Use Expected from the Asset

question 232

Multiple Choice

Useful life is expressed in terms of use expected from the asset under the

• A) declining-balance method.
• B) straight-line method.
• C) units-of-activity method.
• D) none of these answer choices are correct.

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Definitions:

Required Rate Of Return

The minimum expected return on an investment necessary for an investor to consider it worthwhile.

Required Return

The expected yield that an investor anticipates receiving on an investment, taking into account the risk associated with it.

Profitability Index

A capital budgeting tool that measures the ratio between the present value of future cash flows from an investment and the initial investment cost.

After-tax Cash Flows

The net amount of cash that remains after all tax liabilities have been deducted from a company's revenues.