QUESTION 5 A construction store sells a wide variety of cut limestone for residential and commercial building construction. A recent quarry expansion cost $2.9 million and added an estimated 100,000 tons of reserve. Estimate the cost depletion allowance in year 2 using the projections made by the owner. Year 3 14 Volume, 1000 tons 10 15 15 18 Price, $ per ton $ 1.42 million O $0.52 million $ 1.24 million 75 70 70 75 85 $ 1.94 million

ENGR.ECONOMIC ANALYSIS
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QUESTION 5
A construction store sells a wide variety of cut limestone for residential and commercial building construction. A
recent quarry expansion cost $2.9 million and added an estimated 100,000 tons of reserve. Estimate the cost
depletion allowance in year 2 using the projections made by the owner.
Year
2
3
14
Volume, 1000 tons
Price, $ per ton
$ 1.42 million
10
15
15
18
75
70
70
75
85
$0.52 million
O $1.24 million
O $1.94 million
Transcribed Image Text:QUESTION 5 A construction store sells a wide variety of cut limestone for residential and commercial building construction. A recent quarry expansion cost $2.9 million and added an estimated 100,000 tons of reserve. Estimate the cost depletion allowance in year 2 using the projections made by the owner. Year 2 3 14 Volume, 1000 tons Price, $ per ton $ 1.42 million 10 15 15 18 75 70 70 75 85 $0.52 million O $1.24 million O $1.94 million
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