Assume that at the beginning of 2020, Porter Airlines purchased a Bombardier Q400 aircraft at a cost of \(\$ 25,000,000\). Porter expects the plane to remain useful for five years \((5,000,000 \mathrm{~km})\) and to have a residual value of \(\$ 5,000,000\). Porter expects the plane to be flown \(750,000 \mathrm{~km}\) the first year and \(1,250,000 \mathrm{~km}\) each year during years 2 through 4, and \(500,000 \mathrm{~km}\) the last year.

1. Compute Porter's first-year depreciation on the plane using the following methods:

a. Straight-line

b. Units-of-production

c. Double-diminishing-balance 2. Show the airplane's carrying amount at the end of the first year under each depreciation method. Which method results in the highest carrying amount? Which method produces the lowest carrying amount? Briefly explain why.