A furniture company buys a forest to obtain wood for manufacturing furniture. The related costs to the forest are: Cost of buying the forest = $730,000,000 Wood expected to be extracted = 400,000 ton Cost of restoration of the forest = $120,000,000 Residual/salvage value = $233,000,000 Trees cut in year 1 = 107,000 tons Trees cut in year 2 = 89,000 tons Compute the depletion rate and depletion charge for the first 2 years.

A furniture company buys a forest to obtain wood for manufacturing furniture. The related costs to the forest are: Cost of buying the forest = $730,000,000 Wood expected to be extracted = 400,000 ton Cost of restoration of the forest = $120,000,000 Residual/salvage value = $233,000,000 Trees cut in year 1 = 107,000 tons Trees cut in year 2 = 89,000 tons Compute the depletion rate and depletion charge for the first 2 years.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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