Question
an airline company acquires an aircraft engine with a five-year guarantee . based on their past experience, it is estimated that the engine can be
an airline company acquires an aircraft engine with a five-year guarantee . based on their past experience, it is estimated that the engine can be flown for a maximum of 10,000 hours . the average annual flying hours are expected to be 2,000;therefore, the company plans to depreciate the engine over five years .in reality , the number of flying hours is erratic . in a good year , an aircraft can be flown for 3,000 hours . what is the appropriate depreciation method the entity should adopt ?
a- depreciate the aircraft evenly over five years.
b- depreciate the aircraft evenly over three and half years.
c-depreciate the aircraft based on the expected flying hours
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