The depreciable life of an asset can significantly affect the pattern of cash flows. The shorter the depreciable life of an asset, the more quickly the cash flow created by the depreciation write-off will be received.

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This is because a shorter depreciable life means that the cost of the asset is being written off more quickly, which reduces taxable income and increases cash flow earlier on. This can be beneficial for companies that need to manage their cash flow closely, as they can use the savings from earlier tax deductions to reinvest in the business. However, it's important to note that a shorter depreciable life may also mean that the asset needs to be replaced or upgraded more frequently, which could lead to additional expenses.

The Depreciable Life of an Asset Can Significantly Affect the Pattern