A Company Purchased a Tract of Land for Its Natural

Multiple Choice

A company purchased a tract of land for its natural resources at a cost of $1,000,000. It expects to harvest 5,000,000 board feet of timber from this land. The salvage value of the land is expected to be $200,000. The depletion expense per board foot of timber is:

A) $0.75.
B) $0.20.
C) $0.24.
D) $0.04.
E) $0.16.