Question

A mining company plans to improve the infrastructure in a location to start mining activities. The company calculated the costs and earnings listed below to find out if mining would be economically feasible in the location.

A: Cost of land for mining
B: Cost of equipment
C: Cost of labor
D: Miscellaneous costs related to mining
E: Cost of reclamation
F: Earnings from selling the resulting mineral

How can the mining company best decide whether mining activities in the location would be economically feasible?

Select one:
a. by confirming that F is greater than A + B + C + D + E
b. by confirming that D is greater than A + B + C + E + F
c. by confirming that B is lesser than A + C + D + E + F
d. by confirming that C is lesser than A + B + D + E + F

Answer 1

The mining company can determine if mining activities are economically feasible by comparing the earnings from selling minerals to the total costs of land, equipment, labor, miscellaneous costs, and reclamation.

Step-by-step explanation:

The mining company can best decide whether mining activities in the location would be economically feasible by confirming that F is greater than A + B + C + D + E. This means that the earnings from selling the resulting mineral should be greater than the sum of the costs of land, equipment, labor, miscellaneous costs, and reclamation. If the earnings are greater than the total costs, then the mining activities would be economically feasible.

Answer 2

To decide whether any project is economically feasible or not, the profit from selling the product needs to be greater than the cost of actually producing or making the product.

In the given question, our project is mining.
The total costs for the project = A + B + C + D + E
The total profit for the project = F

Therefore, to verify that the project is economically feasible, the profit (F) needs to be greater that the cost (A + B + C + D + E)

Based on the above, the best choice would be:
a. by confirming that F is greater than A + B + C + D + E