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. $0.20.
B. $0.04.
C. $0.24.
D. $0.16.
E. $0.75.
Answer: D
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