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Business, 12.03.2021 15:30 soso585oo

Montana Mining Co. (MMC) paid $200 million for the right to explore and extract rare metals from land owned by the state of Montana. To obtain the rights, MMC agreed to restore the land to a suitable condition for other uses after its exploration and extraction activities. MMC incurred exploration and development costs of $60 million on the project. MMC has a credit-adjusted risk free interest rate is 7%. It estimates the possible cash flows for restoring the land, three years after its extraction activities begin, as follows: (PV of $1, PVA of $1) (Use appropriate factor(s) from the tables provided.) Cash Outflow Probability $26million 30% $78million 70% The asset retirement obligation (rounded) that should be recognized by MMC at the beginning of the extraction activities is:

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Montana Mining Co. (MMC) paid $200 million for the right to explore and extract rare metals from lan...
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