Cavallo Company Acquired a Tract of Land Containing an Extractable

question 56

Multiple Choice

Cavallo Company acquired a tract of land containing an extractable natural resource.Cavallo is required by the purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource.Geological surveys estimate that the recoverable reserves will be 2,500,000 tons and that the extraction will be completed in five years.Relevant cost information follows:

What should be the depletion charge per ton of extracted material?

• A)$4.00
• B)$4.37
• C)$3.97
• D)$3.60

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Definitions:

Tuberculosis

A contagious bacterial infection caused by Mycobacterium tuberculosis, primarily affecting the lungs but can spread to other organs.

COPD

Chronic Obstructive Pulmonary Disease, a lung condition characterized by persistent respiratory symptoms and airflow limitation.

Asthma

Condition in which bronchioles constrict and cause difficulty in breathing.

Allergies

Immune system reactions to certain foreign substances (allergens) that are typically harmless, causing symptoms like sneezing, itching, and swelling.