The Depreciable Life of an Asset Is of Concern to the Financial

question 153

Multiple Choice

The depreciable life of an asset is of concern to the financial manager, and

• A) a longer depreciable life is preferred, because management can postpone purchasing new assets, since the old assets still have a useful life.
• B) a shorter depreciable life is preferred, because it will result in a faster receipt of cash flows.
• C) a longer depreciable life is preferred, because it will result in a faster receipt of cash flows.
• D) a shorter depreciable life is preferred, because management can then purchase new assets, as the old assets are written off.

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Definitions:

Metabolic Function

Refers to the complex set of life-sustaining chemical transformations within the cells of organisms, including catabolism and anabolism.

Chemical Substances

Compounds or elements that consist of atoms and molecules, having specific chemical and physical properties.

Thyroid Gland

An endocrine gland in the neck that produces hormones regulating the body's metabolic rate, heart and digestive function, muscle control, brain development, and bone maintenance.

Exocrine Functions

Activities of exocrine glands that involve secreting substances through ducts to the surface of an organ or tissue or into a vessel.