United Cruises has been operating since 2010. The two existing cruise ships in the United Cruises fleet include the Duke Magic and Princess Platinum. Both of these cruise ships were purchased five years ago, and are being depreciated over a 25-year life. Margot wants the King Voyager and Queen Spirit to be depreciated over a 35-year life because these new cruise ships are more modern and larger than the existing cruise ships in the United Cruises fleet

To navigate in and around the coast of New Zealand, both the King Voyager and the Queen Spirit need to be fitted with a special propeller. For example, the special propeller allows the Queen Spirit to navigate in and around the narrow ports in Auckland and Wellington. The special propeller allows the King Voyager to navigate in and around Milford Sound (one of New Zealands most popular tourist attractions). According to an email from Beyonce, United Cruises has two idle special propellers currently stored in their Balmain premises. The two idle special propellers were purchased nine years ago for $3 million each, both special propellers are compatible with either the King Voyager and Queen Spirit cruise ships, and both propellers have been written off for tax purposes. Forecasts from the accounting department indicate that each special propeller will be worthless 10 years from today. According to the International Sea and Port Authority each special propeller currently has a market value of $1,440,000. Hint: If an operating expense is incurred in Year 0, then you can record the tax deduction in Year 0.