In General, ________

question 129

Multiple Choice

In general, ________.

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

---

Definitions:

Inventory

This term describes the total amount of goods or materials a business has on hand at any given time.

Capital Goods

Assets with a long lifespan that are employed in the creation of goods and services, including machinery, equipment, and buildings.

Economic System

The structure and methods by which a society decides on the allocation of resources and distribution of goods and services.

Goodwill

The intangible asset that arises as a result of the reputation, brand, or customer relations of a business, adding value beyond its tangible assets.