Charles Purchases an Interest in a Uranium Mine for $2,500,000

question 99

Multiple Choice

Charles purchases an interest in a uranium mine for $2,500,000 on June 7, 2018. Recoverable tonnage is estimated at 500,000. During 2018, 25,000 tons are mined and sold for $800,000. Charles incurs $500,000 of expenses during 2018. The percentage depletion rate for uranium is 22%. What is the depletion deduction for 2018?

• A)$125,000
• B)$150,000
• C)$176,000
• D)$200,000
• E)$250,000

---

Definitions:

Monetary Neutrality

The economic theory that changes in the money supply only affect nominal variables and have no long-term effects on real variables like output.

Real Variables

Economic variables that are measured in physical units or have been adjusted for inflation, emphasizing their true value.

Quantity Theory

An economic theory which proposes that changes in the money supply will directly affect price levels in the economy over the long term.

Money Supply

The total amount of money available in an economy at a specific time, including cash, bank deposits, and other liquid assets.