What is the economic life of an asset?
A)the service life that accounts for the costs of an asset replacement
B)the service life that minimizes the marginal cost of an asset
C)the service life that maximizes revenues generated by an asset
D)the service life that minimizes the average cost of an asset over time
E)the service life that minimizes the cost of replacing the asset

Question

Quizplus · Accepted Answer

The economic life of an asset is the period over which it is cost-effective to operate the asset. This period is characterized by minimizing the average cost of the asset over time, including considerations of maintenance, operation, and eventual replacement costs.

What Is the Economic Life of an Asset