Compute the annual depletion on a cost basis, Microeconomics

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Compute the annual depletion on a cost basis

Problem

Western Coal expects to produce 75,000 tons of coal annually for 15 years. The deposit cost $2M to acquire. The annual gross revenues are expected to be $8 per ton, and the net revenues are expected to be $3 per ton.

(a) Compute the annual depletion on a cost basis.

(b) Compute the annual depletion on a percentage basis.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Compute the annual depletion on a cost basis

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