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Question:

What happens if a company lengthen 5 to 10 years the useful life used in computing depreciation on machinery?

nan

Answer:

They usually get a better IRR and NPV. The longer they can depreciate, the better.
By increasing the useful life, the company extends the period over which they will expense the machinery. When a company buys machinery, it estimates how long it will receive a benefit from the machinery. If a company originally estimates that a machine will be productive for 5 years, then it expenses 1/5th of that machine each year. If after 2 years, the company determines that the machine will actually be productive for 10 years, then it depreciates the current net book value over 8 more years.

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