Simpson Mining Is Obligated to Restore Leased Land to Its

question 107

Multiple Choice

Simpson Mining is obligated to restore leased land to its original condition after its excavation activities are over in three years. The cash flow possibilities and probabilities for the restoration costs in three years are as follows: The company's credit-adjusted risk-free interest rate is 5%. The liability that Simpson must record at the beginning of the project for the restoration costs is:

• A)$ 129,576.
• B)$ 145,000.
• C)$ 125,257.
• D)$ 172,768.

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Definitions:

Enterprise

An organization or business venture, particularly one that is large, complex, or involves substantial resources.

IT

Information Technology, referring to the use of computers, software, and networks for the processing and distribution of data.

ERP Systems

Enterprise Resource Planning systems integrate various functions across an organization into a unified database to streamline processes and information across the organization.

TPSs

Transaction Processing Systems, computerized systems that perform and record the daily routine transactions necessary to the operation of a business.