Santa Fe Purchased the Rights to Extract Turquoise on a Tract

Multiple Choice

Santa Fe purchased the rights to extract turquoise on a tract of land over a five-year period. Santa Fe paid $770,250 for extraction rights. A geologist estimates that Santa Fe will recover 9,750 pounds of turquoise. During the current year, Santa Fe extracted 2,925 pounds of turquoise, which it sold for $491,000. What is Santa Fe's cost depletion deduction for the current year?

A) $154,050
B) $231,075
C) $279,290
D) $770,250
E) None of the choices are correct.