on january 1, 2025, foley airline purchased a used airplane for $78,000,000. foley airline expects the plane…

on january 1, 2025, foley airline purchased a used airplane for $78,000,000. foley airline expects the plane to remain useful for four years (5,000,000 miles) and to have a residual value of $8,000,000. the company expects the plane to be flown 1,600,000 miles during the first year.\n\nrequirement 1b. compute foley airlines first - year depreciation expense on the plane using the units - of - production method\nbefore calculating the first - year depreciation expense on the plane using the units - of - production method, calculate the depreciation expense per unit. select the formula, then enter the amounts and calculate the depreciation per unit.\n\nnow, select the formula, enter the amounts, and calculate the companys first - year depreciation expense on the plane using the units - of - production method\n\nrequirement 1c. compute foley airlines first - year depreciation expense on the plane using the double - declining - balance method\nbegin by selecting the formula to calculate the companys first - year depreciation expense on the plane using the double - declining - balance method. then enter the amounts and calculate the depreciation expense for the first year (enter \0\ for items with a zero value )

on january 1, 2025, foley airline purchased a used airplane for $78,000,000. foley airline expects the plane to remain useful for four years (5,000,000 miles) and to have a residual value of $8,000,000. the company expects the plane to be flown 1,600,000 miles during the first year.\n\nrequirement 1b. compute foley airlines first - year depreciation expense on the plane using the units - of - production method\nbefore calculating the first - year depreciation expense on the plane using the units - of - production method, calculate the depreciation expense per unit. select the formula, then enter the amounts and calculate the depreciation per unit.\n\nnow, select the formula, enter the amounts, and calculate the companys first - year depreciation expense on the plane using the units - of - production method\n\nrequirement 1c. compute foley airlines first - year depreciation expense on the plane using the double - declining - balance method\nbegin by selecting the formula to calculate the companys first - year depreciation expense on the plane using the double - declining - balance method. then enter the amounts and calculate the depreciation expense for the first year (enter \0\ for items with a zero value )

Answer

Explanation:

Step1: Determine the straight - line depreciation rate

The straight - line depreciation rate is $\frac{1}{Useful\ life}$. Here, the useful life is 4 years, so the straight - line depreciation rate $r=\frac{1}{4}=0.25$.

Step2: Calculate the double - declining - balance depreciation rate

The double - declining - balance depreciation rate is $2r$. So, $2r = 2\times0.25=0.5$ or $50%$.

Step3: Calculate the first - year depreciation

The formula for double - declining - balance depreciation is $(Cost - Accumulated\ depreciation)\times$ double - declining - balance depreciation rate. In the first year, accumulated depreciation is $0$. The cost of the airplane is $C = 78000000$. So, the first - year depreciation $D=(78000000 - 0)\times0.5$

Answer:

$39000000$