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