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Assume that at the beginning of 206, AirAsia, a regional airline operating predominantly in Southeast Asia, purchased a used Boeing 737 aircraft at a cost
Assume that at the beginning of 206, AirAsia, a regional airline operating predominantly in Southeast Asia, purchased a used Boeing 737 aircraft at a cost of $55,000,000. AirAsia expects the plane to remain useful for five years (7 million miles) and to have a residual value of $6,000,000. AirAsia expects to fly the plane 875,000 miles the first year, 1,475,000 miles each year during the second, third, and fourth years; and 1,700,000 miles the last year. 1. Compute AirAsia's first-year depreciation on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-declining-balance 2. Show the airplane's book value at the end of the first year under each depreciation method. Requirement 1. Compute AirAsia's first-year depreciation on the plane using the following methods: a. Using the straight-line method, depreciation is S for 206. b. Using the units-of-production method, depreciation is $ for 206. c. Using the double-declining-balance method, depreciation is $ for 206. Requirement 2. Show the airplane's book value at the end of the first year under each method
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