A Coal Company Invests $12 Million in a Mine Estimated

Multiple Choice

A coal company invests $12 million in a mine estimated to have 20 million tonnes of coal and no residual value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tonnes of coal are extracted and sold. What is the depreciation included in cost of goods sold for the first year?

A) $600,000
B) $240,000
C) $60,000
D) Cannot be determined from the information provided.