Your company purchases the rights to all the gravel on a piece of property for $100,000 and adds a road to the property owner's land at a cost of $50,000 and buys a new dump truck and loader for $200,000. The expected amount of gravel to be extracted is initially estimated at 50 tons. In year one, 15 tons of gravel is excavated. In year two, a better estimate of the amount of gravel remaining on the property comes in at 30 tons. What is the straight line depletion rate for year two?
Box 1: Select the best answer
$3,500 per ton