Answer:
Annual depreciation= $6,240,000
Explanation:
Giving the following information:
Purchasing cost= $42,000,000
It is expected to fly 350,000,000 miles.
The plane travels 52,000,000 miles the first year
Using the units of production method, we need to use the following formula for each year:
Annual depreciation= [(original cost - salvage value)/useful life of production in miles]*miles travelled
Annual depreciation= (42,000,000 / 350,000,000)*52,000,000
Annual depreciation= $6,240,000
