Answer to Question #26362 in Economics of Enterprise for RAMA

Question

(b) Is the change in asset life unethical, or is it simply a good business practice by an astute
president?

Answer 1

Simply changing of equipment asset life is unetical, because this equipment is calculated to work for 8 years,
after which it will be outdated and worn out. And thus it will increase the cost to maintain it.
So, increasing the asset life of it is not only unethical, but also is not rational, as it may produce damaged
or low-quality products.
That's why this way of doing business is not appropriate for this company.