Reference no: EM13745095
Schefter Mining operates a copper mine in Wyoming. Acquisition, exploration, and development costs totaled $8.2 million. Extraction activities began on July 1, 2011.
After the copper is extracted in approximately six years, Schefter is obligated to restore the land to its original condition, including constructing a park. The company’s controller has provided the following three cash flow possibilities for the restoration costs:
Cash Flow Probability
1. $700,000 30%
2. $800,000 25%
3. $900,000 45%
The company’s credit-adjusted, risk-free rate of interest is 5%, and its fiscal year ends on December 31.
Required:
a. What is the initial cost of the copper mine? (Round computations to nearest whole dollar)
b. How much accretion expense will Schefter report in its 2011 income statement?
c. What is the carrying value (book value) of the asset retirement obligation that Schefter will report in its 2011 balance sheet?
d. Assume that actual restoration costs incurred in 2017 totaled $860,000. What amount of gain or loss will Schefter recognize on retirement of the liability?
Approximate current share price
: Cambridge Motors common stock is expected to have extraordinary growth of 20% per year for 2 years, at which time the growth rate will settle into a constant 6%. If the discount rate is 15% and the most recent dividend was $2.50, what should be th..
|
Identify two significant technological innovations
: Identify two significant technological innovations/achievements from the late 19th and early 20th centuries. Describe, in your opinion, why you believe your choices were significant global impacts during that time period.
|
Solve enterprise value-ebitda multiple with market value
: How to solve enterprise value-EBITDA multiple with market value, cash, debt, EBIT, and total in depreciation and amortization
|
Timeline detailing a stream of cash flows
: Consider the following timeline detailing a stream of cash flows. Date 0 1 2 3 4? $5000 $6000 $7000 $8000Cash Flow
|
Schefter Mining operates a copper mine in Wyoming
: Schefter Mining operates a copper mine in Wyoming. Acquisition, exploration, and development costs totaled $8.2 million. Extraction activities began on July 1, 2011. What is the initial cost of the copper mine? How much accretion expense will Sche..
|
Great aunt matilda put some money in an account
: Your great aunt Matilda put some money in an account for you on the day you were born. This account pays 8% interest per year. On your 21st birthday the account balance was $5,033.83
|
Regarding money market instruments
: 1. Regarding money market instruments, how do U.S. Treasury bills differ from short-term municipal securities?2. What are book-entry securities? Can U.S. Treasury securities be held in book-entry format?
|
Compute the dollar-value LIFO inventory valuation
: Appleton Inc. adopted dollar-value LIFO on January 1, 2011, when the inventory value was $1,200,000. The December 31, 2011, ending inventory at year-end costs was $1,430,000 and the cost index for the year is 1.1.
|
What riots erupted as a result of racial tensions
: Discuss the origins and role of the NAACP during the pre and post segregation era. What riots erupted as a result of racial tensions during the Civil Rights era?
|