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

question 164

Multiple Choice

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

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