Steel Rolling Company Purchased a Mine on January 1, 2015

question 15

Multiple Choice

Steel Rolling Company purchased a mine on January 1, 2015, for $500,000 and it is estimated to contain 30,000 tons of iron ore. There is no residual value. The company has extracted 2,500 tons of ore in 2015 and 3,800 tons of ore in 2016. What is depletion expense for 2016? (Do not round your intermediate calculations) .

• A)$33,333
• B)$42,667
• C)$63,333
• D)$63,667

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Definitions:

Expected Return-Beta Relationship

A concept in finance that describes the relationship between the risk of an investment and its expected return, based on the beta coefficient.

APT

The Arbitrage Pricing Theory, a model that determines the required return on an asset by considering various macroeconomic factors.

CAPM

The Capital Asset Pricing Model, a financial theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Firm-Specific Factors

Unique characteristics or circumstances affecting a company that can influence its stock's performance, unrelated to the overall market movements.