Anglogold Ashanti (a gold mining company in South Africa) paid $500 million for the right to explore and extract rare metals from land owned by the Government of Namibia. To obtain the rights, Anglogold Ashanti agreed to restore the land to a suitable condition for other uses after its exploration and extraction activities. Anglogold incurred exploration and development costs of $80 million on the project. The company's 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: Cash Outflow Probability $ 15 million 60 % $ 40 million 40 % The asset retirement obligation (rounded) that should be reported on Anglogold's balance sheet one year after the extraction activities begin is? NOTE: For (PV of $1, PVA of $1), use 0.81630 as the appropriate discount factor to solve this problem.. Round intermediate calculations to one decimal place. Enter your answers in millions rounded to 1 decimal place.
Anglogold Ashanti (a gold mining company in South Africa) paid $500 million for the right to explore and extract rare metals from land owned by the Government of Namibia. To obtain the rights, Anglogold Ashanti agreed to restore the land to a suitable condition for other uses after its exploration and extraction activities. Anglogold incurred exploration and development costs of $80 million on the project.
The company's credit-adjusted risk free interest rate is 7%. It estimates the possible
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The asset retirement obligation (rounded) that should be reported on Anglogold's balance sheet one year after the extraction activities begin is?
NOTE: For (PV of $1, PVA of $1), use 0.81630 as the appropriate discount factor to solve this problem..
Round intermediate calculations to one decimal place. Enter your answers in millions rounded to 1 decimal place.
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