Question

You and your colleague, Michael, are debating how to best handle a large expenditure on a piece of machinery as a capital budgeting decision. Michael says that his accounting background suggests that because the benefits of this large piece of machinery will be realized over the project's ten-year life, so should its costs. Discuss why you disagree or disagree with Michael.

Answer 1

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

We should "Agree with Michael" because he is using the concept/principle of accrual & Matching here.

Expenses should be reported in the same period as the corresponding revenue is earned.

When a which capital expenditure is made on a project.
It's noted on Balance as an Asset, from time to time (usually every year), a portion of it is reported as expenditure in the form of "Depreciation".

Depreciation is allocating of the cost of a tangible asset over its useful life. Depreciation shows how much of the value of the assets is used up.  

Depreciation is used,
So that appropriate profit can be reported for the period.