ome it View His Book ma le Window Hel PMG-Excel-AR.pdos(6- Isac.X Ohttps://carto

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ome it View His Book ma le Window Hel PMG-Excel-AR.pdos(6- Isac.X Ohttps://cartoon hd.e ?http://9cartoon Help Save & Exit S ? / @My.UTEP HKPMG-Excel-AR.pdf Connect C https://newconnect.mheducation.com/flow/connect.html . :Apps ? Pink Floyd-Anothe GO https://www.netflix.https://my.utep.edu. x.Vortex isk Ch. 10 Assessment Saved 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. M million on the project. MC incurred exploration and development costs of $60 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 S1, PVA of $) (Use appropriate factor(s) from the tables provided.) Cash Outflow Probabilit)y $10 million $30 million 60% 40% The asset retirement obligation (rounded) that should be recognized by MMC at the beginning of the extraction activities is: Multiple Choice $8.2 million. Mc Graw Hill

Explanation / Answer

Expected cash outflow 10 m*60%                         6 Million 30 m*40%                       12 Million Total                       18 Million PVF at 3 year 7%                 0.816 Cash Flow(18*.816)                   14.7 Million

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