Question

Locations Cost of land Cost of equipment Cost of mining and reclamation Time taken to mine the area 1 $100,000 $10,000 $5,000 per day 30 days 2 $35,000 $6,000 $4,500 per day 45 days 3 $30,000 $7,500 $3,500 per day 120 days 4 $40,500 $8,000 $7,000 per day 65 days Considering all costs, which location will cost the least to the company to mine?

Answer 1

Location 2 will cost the least to the company to mine.

Step-by-step explanation:

a) Data and Calculations:

Locations Cost of land Cost of Cost of mining Time taken to

equipment and reclamation mine the area

1 $100,000 $10,000 $5,000 per day 30 days

2 $35,000 $6,000 $4,500 per day 45 days

3 $30,000 $7,500 $3,500 per day 120 days

4 $40,500 $8,000 $7,000 per day 65 days

Locations Cost of land Cost of Cost of mining Total

equipment and reclamation Costs

1 $100,000 $10,000 $150,000 ($5,000 * 30) $260,000

2 $35,000 $6,000 $202,500 ($4,500 * 45) $243,500

3 $30,000 $7,500 $420,000 ($3,500 * 120) $457,500

4 $40,500 $8,000 $445,000 ($7,000 * 65) $503,500