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Book Value of Fixed Assets

The following data (in millions) were adapted from recent annual reports of United Parcel Service, Inc. (UPS). UPS provides delivery and freight services throughout the world.

	Year 2	Year 1
Vehicles	$553,220		$320,868
Aircraft	525,559		414,915
Land	82,983		71,919
Building and improvements	669,396		503,430
Equipment	713,654		708,122
Construction in progress	11,064		5,532
Less accumulated depreciation	(702,589)		(586,413)

a. Compute the book value of the fixed assets for years 1 and 2.

Year 2 book value	$fill in the blank 1 million
Year 1 book value	$fill in the blank 2 million

b. UPS appears to have

expandedreducedexpanded

its operations in year 2 from

salespurchasespurchases

of fixed assets. This is typical of

slowlyrapidlyrapidly

growing companies.