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Assume that at the beginning of 2013, Speedy Delivery, a FedEx competitor, purchased a used Jumbo 747 aircraft at a cost of $44,700,000. Speedy Delivery
Assume that at the beginning of 2013, Speedy Delivery, a FedEx competitor, purchased a used Jumbo 747 aircraft at a cost of $44,700,000. Speedy Delivery expects the plane to remain useful for five years (7.0 million miles) and to have a residual value of $4,700,000. Speedy Delivery expects to fly the plane 800,000 miles the first year, 1,375,000 miles each year during the second, third, and fourth years, and 2,075,000 miles the last year. Compute Speedy Delivery's depreciation for the first two years on the plane using the following methods: Straight-line Units-of-production (round depreciation per mile to the closest cent) Double-declining-balance Show the airplane's book value at the end of the first year under each depreciation method. Assume that at the beginning of 2013, Speedy Delivery, a FedEx competitor, purchased a used Jumbo 747 aircraft at a cost of $44,700,000. Speedy Delivery expects the plane to remain useful for five years (7.0 million miles) and to have a residual value of $4,700,000. Speedy Delivery expects to fly the plane 800,000 miles the first year, 1,375,000 miles each year during the second, third, and fourth years, and 2,075,000 miles the last year. Compute Speedy Delivery's depreciation for the first two years on the plane using the following methods: Straight-line Units-of-production (round depreciation per mile to the closest cent) Double-declining-balance Show the airplane's book value at the end of the first year under each depreciation method
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