9. [Comparison of firms with different depreciable lives] Delta Airlines [DALI, a competitor of AMR, reported the following information regarding its depreciation of flight equipment Property and Equipment-- Property and equipment is recorded at cost and depreciated on a straight-line basis to estimated residual values over their estimated useful lives. The estimated useful lives for major asset classifications are as follows. Asset Classification Owned flight equipment Flight equipment under capital lease Ground property and equipment Leasehold rights and landing slots Estimated Useful Life 15 25 years Lease Term 3-30 years Lease Term Residual values for flight equipment range from 5%-25% of cost. (Source Delta Airlines 10-K Report, June 30, 2000)

a. Comparing the data above with the disclosures by AMR (Ex- hibit 8-7), discuss any difference between Delta and AMR with respect to each of the following prior to the AMR change in 1999. (i) Depreciation expense () Shareholders' equity (iii) Cash from operations (iv) Quality of earnings