What is the useful life in years for Project 2?

Determining the useful life in years for a project typically involves assessing the duration over which the project is expected to generate benefits, such as revenue or cost savings. The useful life can be influenced by factors such as the type of equipment or technology used, industry standards, and economic factors.

In this scenario, stating that the useful life for Project 2 is six years suggests that it is reasonable to expect the project will remain effective and productive for that duration. This aligns with common practices in accounting and finance, where the useful life is set based on both industry benchmarks and specific project characteristics, including expected wear and tear, technological obsolescence, and regulatory lifespan.

When evaluating useful life, it’s also important to consider depreciation methods that may be applicable, as they often impact financial statements and decision-making regarding capital investments. A six-year useful life indicates a balanced approach between immediate returns and long-term sustainability of the project's outputs.