Upper A Celty Airline jet costs $ 28,000,000 and is expected to fly 200,000,000 miles during its 10-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels 1,000,000 miles the first year, how much depreciation should Celty Airline record under the units-of-production method?

A. $2,800,000
B. $140,000
C. $560,000
D. Cannot be determined from information given

Ans: B. $140,000

Business

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a. true b. false

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An investor wants to buy a vacant parcel of land, build a building on it and lease it as a hardware store for $5,000 a month. He estimates that the building will cost $300,000 and the expenses will be $12,000 per year. If he wants to use a 12% capitalization rate what is the most that he can pay for the land:

A: $10,000; B: $100,000; C: $200,000; D: Nothing.

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