Tech Takeover Inc. invents a new type of smartphone, and has a patent on that phone for 20 years. However, the company only expects the smartphone to have an economic life of 5 years, after which it will become obsolete. Tech Takeover Inc. should: 1. Amortize the patent over 15 years 2. Not amortize the patent 3. None of the answers are correct 4. Amortize the patent over 5 years 5. Amortize the patent over 20 years
Tech Takeover Inc. invents a new type of smartphone, and has a patent on that phone for 20 years. However, the company only expects the smartphone to have an economic life of 5 years, after which it will become obsolete. Tech Takeover Inc. should: 1. Amortize the patent over 15 years 2. Not amortize the patent 3. None of the answers are correct 4. Amortize the patent over 5 years 5. Amortize the patent over 20 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Multiple Choice Question)
Tech Takeover Inc. invents a new type of smartphone, and has a patent on that phone for 20 years. However, the company only expects the smartphone to have an economic life of 5 years, after which it will become obsolete. Tech Takeover Inc. should:
1. Amortize the patent over 15 years
2. Not amortize the patent
3. None of the answers are correct
4. Amortize the patent over 5 years
5. Amortize the patent over 20 years
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