Chapter 10, Problem 4QC

A Celty Airline jet costs $28,000,000 and expected to fly 200,000,000 miles during its 10-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels 1,000,000 miles the first year, how much depreciation should Celty Airline record under the units-of-production method?

Learning Objective 2

a. $2,800,000
b. $140,000
c. $560,000
d. Cannot be determined from the data given