Monroe Minerals Company Purchased a Copper Mine for $120,000,000

Monroe Minerals Company purchased a copper mine for $120,000,000. The mine was expected to produce 50,000 tons of copper over its useful life. During Year 1, the company extracted 6,000 tons of copper. The copper was sold for $4,500 per ton. Assume that the company incurred $8,040,000 in operating expenses during Year 1. Based on this information, how much net income would Monroe report in Year 1?

A) $12,600,000.
B) $4,560,000.
C) $6,360,000.
D) $14,400,000.

Correct Answer:

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