Assume that on September 30, 2014, Swiss, the national airline of Switzerland, purchased an Airbus..

Assume that on September 30, 2014, Swiss, the national airline of Switzerland, purchased an Airbus aircraft at a cost of €40,000,000 (€ is the symbol for the euro). Swiss expects the plane to remain useful for seven years (5,000,000 km) and to have a residual value of €5,000,000. Swiss expects the plane to be flown 500,000 km during the remainder of the first year ended December 31, 2014. Compute Swiss s depreciation on the plane for the year ended December 31, 2014, using the following methods: a. Straight-line b. Units-of-production c. Double-diminishing-balance Which method would produce the highest net income for 2014? Which method produces the lowest net income?

 

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