Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 53

Vesco Mineral Resources purchased mineral rights to land in the foothills of the Santa Cristo mountains. The cost of the purchase was $9 million. Vesco originally thought that it would be able to extract 200,000 tons of lignite from the land, but further exploration revealed that 280,000 tons could be economically removed. If the company sold 20,000 tons in year 1 and 30,000 tons in year 2, what would the depletion charges be each year according to the cost depletion method