If technology changes rapidly, a firm should:
A) depreciate plant assets using the same method used for its tax returns.
B) depreciate plant assets over long periods of time.
C) consider an accelerated rate of depreciation.
D) use the straight-line method of depreciation as it is the easiest.

Question

Quizplus · Accepted Answer

Considering an accelerated rate of depreciation allows the firm to write off the value of their plant assets more quickly, which is appropriate in a rapidly changing technological environment. This allows the firm to remain competitive by having the most up-to-date assets.

If Technology Changes Rapidly, a Firm Should