On January 1, 2020, UML Resources entered into an agreement with the state of Alaska to obtain the rights to operate a mineral mine for $8 million. As part of the agreement, UML agrees to restore the land to its original condition after mining operations are completed in approximately ten years. Management has provided the following possible outflows for the restoration costs that will occur ten years from now: Cash Outflow Probability $ 100,000 10 % $ 200,000 50 % $ 300,000 40 % UML's credit-adjusted risk-free interest rate is 6%. The asset retirement obligation (rounded) that should be recognized by UML at the beginning of the extraction activities is:
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Business, 22.06.2019 03:30
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