A gold mine was purchased for $10 million. It has an anticipated gross income of $8.0 million per year for years 1 to 5 and $5.0 million per year after year 5. Assume that depletion charges do not exceed 50% of taxable income. Compute the annual depletion amount and determine how long it will take to recover the initial investment.

Answer rating: 100% (QA)

A 15 depletion applies to gold Depletion amounts are Years 1 to 5 015x8 ... View the full answer