On January 2, 2012, Capital Company added a new jet to its fleet. It costs $12,000,000 and is estimated to have a useful life of 10 years and a residual value of $2,000,000. It is estimated to have 10,000 hours of flying time. During its first year, it flew 900 hours.

What is the first year's depreciation using the straight-line depreciation method?

900 hours 2012 flight time $1,000 depreciation per hour = $900,000

900 hours 2012 flight time $2,000 depreciation per hour = $1,800,000

900 hours 2012 flight time $1,000 depreciation per hour = $1,900,000

The answer cannot be calculated from the given information.

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