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..ooo Verizon . 11:09 AM sbu.grtep.com COAL PROPERTY ACTIVITY Introduction: Your

ID: 121538 • Letter: #

Question

..ooo Verizon . 11:09 AM sbu.grtep.com COAL PROPERTY ACTIVITY Introduction: Your friend Madison Huguenot has a farm in Pennsylvania. The farm is about 50 acres, but hasn't been used agriculturally for many years- Madison uses it mostly to have a quiet place to get away to. Her neighbors have mentioned that there are coal seams underground in the area, and driving around she has seen coal seams in the roadcuts and so forth, but she never thought much about it until she was approached recently by the Acme Coal Mining Company. The Acme Coal Mining Company has been contracted by the Acme Electric Company to provide coal to their coal-burning power plant, and they are looking for mineable coal close to the power plant. Since Madison's farm is only ten miles from the power plant, her coal is in a prime location. Acme made her an offer for the coal under her property - she would still own the land, but she would give Acme the right to mine the coal. In return, Acme would pay her $1,500,000 for the coal Obviously Madison needs to take a lot of things into consideration in deciding whether or not to sell her coal to Acme. She is not sure whether she wants to allow her land and the farm to be

Explanation / Answer

Average thickness of seam A is 6 feets.

Average thickness of seam B is 8 feets.

Volume of seam A is 50 x 6 = 300 Acre-feet

Volume of seam B is 50 x 8 = 400 Acre-feet

Tons of coal in seam A is = 300 x 1800 = 540,000 tons

Tons of coal in seam B is = 400 x 1800 = 720,000 tons

Surface mining should be done for seam A

Underground mining should be done for seam B.