Cardinal Aviation has called on your business consulting group again for advice. Brad has decided that they should extend the life of the aircraft from an original estimate of 15 years to 20 or 25 years. Three years have already been taken on the aircraft. He believes this will allow them to show a larger profit.
Discuss the alternative and the reasons for doing it. What are the pros and cons? In your recommendation to Cardinal, be sure to state the implications of your decision on all of the financial statements, not just the income statement.
Draw up a rough draft of what you are going to put in the final letter/report to Cardinal.