Refer to the data for S8-7. Compute second-year depreciation on the plane using the following methods:
a. Straight-line
b. Units-of-production
c. Double-declining-balance
In Exercise 8.7
At the beginning of the year, Orbit Airways purchased a used Boeing aircraft at a cost of $45 million. Orbit Airways expects the plane to remain useful for five years (3 million kilometers) and to have a residual value of $5 million. Orbit Airways expects the plane to be flown 750,000 kilometers the first year and 1.5 million kilometers the second year.