Roan Corp
Subject:FinancePrice: Bought3
Roan Corp. acquired a tract of land containing an extractable natural resource. The company is required by the government 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 6.2 million tonnes, and that the land will have a value of $1.2 million after restoration. Relevant cost information follows:
Land$8,000,000Estimated restoration costs2,100,000
If Roan maintains no inventories, what is the depletion charge per tonne of extracted resource?
