Problem
K.K.West, a gold mining company, has operated a gold mine in California for the last year.
It extracted 600 pounds during the last year. The IRS set the percentage depletion rate for gold at 15%. The mine is estimated to contain a total of 25,000 pounds of gold. The land initially cost $9.6 million. The company had a gross income of $4,000/ pound and the mining expenses of $1 million for the last year.
What is the maximum depletion for the mine in the last year?