Final answer:
The best theoretical support for accelerated depreciation is Encouraging prompt replacement of assets. (option 1)
Step-by-step explanation:
The best theoretical support for accelerated depreciation is option 1: Encouraging prompt replacement of assets. Accelerated depreciation allows businesses to deduct a larger portion of the value of an asset in the early years of its use, which creates an incentive for companies to replace their assets sooner.
By encouraging prompt replacement of assets, businesses can stay competitive and ensure that they are using the most efficient and up-to-date equipment and technology, which can lead to increased productivity and profitability.
Furthermore, replacing assets promptly can also help businesses take advantage of technological advancements and innovations, leading to cost savings and improved operational efficiency.
Option 1, "Encouraging prompt replacement of assets," best supports accelerated depreciation. By providing tax advantages for early replacement, businesses are motivated to modernize their asset base, fostering technological advancement and economic efficiency. This aligns with the broader economic goal of promoting timely upgrades to enhance productivity and competitiveness.