Part 1) Compute depreciation and book value by three methods for the first year only: Assume that at the beginning of 2011, Fast Delivery, a UPS competitor, purchased a used Jumbo 747 aircraft at a cost of $44,400,000. Fast Delivery expects the plane to remain useful for five years (6.5 million miles) and to have a residual value of $5,400,000. Fast Delivery expects to fly the plane 725,000 miles the first year, 1,225,000 miles each year during the second, third, and fourth years, and 2,100,000 miles the last year. Part 2)

• 1.Compute Fast Deliverys depreciation for the first two years on the plane using the following methods:
  • a.Straight-line
  • b.Units-of-production
  • c.Double-declining-balance
• 2.Show the airplanes book value at the end of the first year under each depreciation method.