This exercise uses the Logan Services data from Short Exercise 9-3. Logan Services is deciding which depreciation method to use for income tax purposes.
Requirements
1. Which depreciation method offers the tax advantage for the first year? Describe the nature of the tax advantage.
2. How much extra depreciation will Logan Services get to deduct for the first year as compared with the straight-line method?

Data From Short Exercise 9-3:

At the beginning of the year, Logan Services purchased a used airplane for \($65,000,000\). Logan Services expects the plane to remain useful for 4 years (6 million miles) and to have a residual value of \($5,000,000\). The company expects the plane to be flown 1.3 million miles the first year.