On January 1, 2017, QuickAir Transportation Company purchased a used aircraft at a cost of $62,400,000. QuickAir expects the plane to remain useful for five years (8,500,000 miles) and to have a residual value of $6,400,000. QuickAir expects to fly the plane 725,000 miles the first year, 1,650,000 miles each year during the second third, and fourth years, and 825,000 miles the last year. (Click the icon to view the first year depreciation amounts under each method.) Read the requirements 1. Which depreciation method offers the highest tax advantage for the first year? Describe the nature of the tax advantage. Requirements The method offers the tax advantage for the first year of the asset's use. Reference Assume QuickAir is trying to decide which depreciation method to use for income tax purposes. The company can choose from among the following methods: (a) straight-line, (b) units-of-production, or (c) double-declining-balance methods. 1. Which depreciation method offers the highest tax advantage for the first year? Describe the nature of the tax advantage. 2. How much income tax will QuickAir save for the first year of the airplane's use under the method you just selected as compared with using the straight-line depreciation method? The company's income tax rate is 33%. Ignore any eamings from investing the extra cash. Method (a) straight-line (b) units-of-production (c) double-declining-balance First year depreciation S 11,200,000 S 6,249,500 S 24,980,000 Print Done Print Done Click to select your answer(s) and then click Check Answer 3 parts remaining Clear All Check