Question
USA Oil Corporation purchased the rights to an offshore oil well for $50,000,000. The company expects the oil well to produce 20,000 barrels of oil
USA Oil Corporation purchased the rights to an offshore oil well for $50,000,000.
The company expects the oil well to produce 20,000 barrels of oil during its life.
USA Oil removed 660,000 barrels of oil.
1. How much depletion should USA Oil Corporation record for 2010?
2. What is the book value of the oil rights at December 31, 2010, the end of the fiscal year?
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Optimization Methods In Finance
Authors: Gérard Cornuéjols, Javier Peña, Reha Tütüncü
2nd Edition
1107056748, 9781107056749
