"Depreciation at Delta Air Lines and Singapore Air lines"
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Case Study 2 "Depreciation at Delta Air Lines and Singapore Air lines" Harvard Business School 1 Annual Depreciation Expenses Depreciation for each $100 gross value of aircraft Annual Depreciation expenses = (Initial value - End residual value)/ (number of years) 1.1 Delta airlines Given Data: Before July 1st 1986 From July 1st 1986 - March 31st 1993 From April 1st 1993 - today Residual (Percentage %) 10 10 5 Average Age of Aircraft (Years) 10 15 20 Depreciation expenses per annum (Dollars) 9 6 4.75 Depreciation expenses calculation for $100 worth of aircraft value. 1. Prior to July 1st 1986 Depreciation expense = (100 - (0.1 * 100))/10 = 90/10 = $9 2. From July 1st 1986 to March 31st 1993 Depreciation expense = (100 - (0.1 * 100))/15 = 90/15 = $6 3. From April 1st 1993 to today Depreciation expense = (100 - (0.05 * 100))/20 = 95/20 = $4.75 1.2 Singapore airlines Before April 1st 1989 From April 1st 1989 - 1993 From April 1st 1993 - today Residual (Percentage %) 10 20 20 Average Age of...


