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What is the total capitalized cost of the mine

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Problem 1: 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. None of the answers are correct.

C. $5,350,000

D. $7,731,490

E. $4,731,490

Reference no: EM132781139

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