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What is the total capitalized cost of the mine

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Question - Brazell Corporation mines minerals out of the ground. They purchased rights to explore land in Montana which cost $1,200,000. Exploration and development costs were $1,150,000. After mining the minerals, Brazell has a legal obligation to restore the land to its original state. The cost of this restoration is estimated to be 3,000,000, and the present value of this restoration cost using the credit-adjusted risk free interest rate is $2,381,490. What is the total capitalized cost of the mine?

a. $2,350,000

b. $5,350,000

c. $4,731,490

d. $7,731,490

Reference no: EM132534943

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