Question

The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. What is the expected life of the computer system?

1) 1 year
2) 2 years
3) 3 years
4) 4 years

Answer 1

The expected life of the computer system is four years, with no salvage value and life expectancy not impacted by acquisition date. The correct answer is option 4.

Step-by-step explanation:

The expected life of the computer system, which was acquired on October 1, is four years. There is no salvage value indicated, and the life expectancy is not affected by the month of acquisition. Therefore, the correct answer to what the expected life of the computer system is would be option 4: 4 years.

This question touches on principles of asset depreciation and business accounting, where the useful life of an asset is used to allocate the cost of the asset over its useful life. In the broader context, this concept is somewhat related to planned obsolescence, where manufacturers design products with a limited effective lifespan to encourage consumers to purchase new products sooner.