If technology changes rapidly,a firm should
A)expense plant assets immediately because of the uncertainty of future benefits.
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 match the decreasing value of its assets to the rapidly changing technology they support. This approach ensures that the value of the assets is not overstated on the balance sheet and enables the firm to invest in newer technologies as they emerge. Expensing assets immediately in option A is not appropriate as it does not follow generally accepted accounting principles, and depreciating assets over long periods of time in option B can overstate their value. Option D may be the easiest, but it does not address the issue of rapidly changing technology.

If Technology Changes Rapidly,a Firm Should