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

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Definitions:

Rubber Division

A business segment or department within a company that is responsible for the production and/or sales of rubber products.

Common Corporate Fixed Costs

Expenses incurred by a corporation that do not vary with the level of production or sales, and are shared across different segments or products of the company.

Contribution Margin

The difference between sales revenue and variable costs, which contributes to covering fixed costs and generating profit.

Fixed Costs

Costs that do not change with the level of output or activity, such as rent or salaries.