Compute luxuryair depreciation on the plane

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Reference no: EM131065845

In question #2 the choices shown in blank 1 are the same as blank 2

Assume that on September 30, 2011, Luxuryair, the national airline of Germany, purchased a Jumbo aircraft at a cost of 42,500,000 (is the symbol for the euro). Luxuryair expects the plane to remain useful for five years (5,000,000 miles) and to have a residual value of 4,250,000. Luxuryair will fly the plane 350,000 miles during the remainder of 2011.

Compute Luxuryair's depreciation on the plane for the year ended December 31, 2011, using the following methods:

a. Straight-line

b. Units-of-production

c. Double-declining-balance. Which method would produce the highest net income for 2011? Which method produces the lowest net income?

Reference no: EM131065845

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