Question: In 1970 United Airlines bought four new jumbos for 21 8
In 1970 United Airlines bought four new jumbos for $21.8 million each. These planes were written down straight-line over 16 years to a residual value of $0.2 million each. However, they could have been sold in 1986 for about $20 million each.22How would the company’s financial ratios have changed if it had used a depreciation schedule that more nearly reflected the actual decline in aircraft values?
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