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Beechnut Mines began developing an open pit copper and zinc mine in northern Ontario in April 2023. As part of the regulatory approvals to develop and extract minerals from the site, the company committed to restore the mine site. Given the nature of open pit mining, it is not possible to fully restore the site to its original state. Nevertheless, the commitment requires the company to replant the area such that it will be suitable for wildlife and recreation (hiking, paddling, etc.). An independent environmental consultant hired by the mining regulator has estimated that the future site restoration costs will amount to $60 million at the end of the production life of the mine Management estimates that the mine will begin production in the spring of 2025 and continue for 30 years. Beechnut has a March 31 year-end date and an incremental borrowing rate of 9%. Required a. Compute the present value of the future site restoration costs as of the spring of 2023. (Round your final answer to the nearest whole dollar.) 3,806,303 b. Compute the amount of depreciation expense related to the site restoration costs for the years ending 2024, 2025, and 2026 using the straight-line method. (For a depreciation amount with a $0 balance, make sure to enter "0" in the appropriate year.) Depreciation 2024 Depreciation 2025 Depreciation 2026

Beechnut Mines began developing an open pit copper and zinc mine in northern Ontario in April 2023. As part of the regulatory approvals to develop and extract minerals from the site, the company committed to restore the mine site. Given the nature of open pit mining, it is not possible to fully restore the site to its original state. Nevertheless, the commitment requires the company to replant the area such that it will be suitable for wildlife and recreation (hiking, paddling, etc.). An independent environmental consultant hired by the mining regulator has estimated that the future site restoration costs will amount to $60 million at the end of the production life of the mine Management estimates that the mine will begin production in the spring of 2025 and continue for 30 years. Beechnut has a March 31 year-end date and an incremental borrowing rate of 9%. Required a. Compute the present value of the future site restoration costs as of the spring of 2023. (Round your final answer to the nearest whole dollar.) 3,806,303 b. Compute the amount of depreciation expense related to the site restoration costs for the years ending 2024, 2025, and 2026 using the straight-line method. (For a depreciation amount with a $0 balance, make sure to enter "0" in the appropriate year.) Depreciation 2024 Depreciation 2025 Depreciation 2026

Business Its Legal Ethical & Global Environment
Business Its Legal Ethical & Global Environment
10th Edition
ISBN:9781305224414
Author:JENNINGS
Publisher:JENNINGS
Chapter11: Environmental Regulation And Sustainability
Section: Chapter Questions
Problem 9QAP
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Beechnut Mines began developing an open pit copper and zinc mine in northern Ontario in April 2023. As part of the regulatory approvals to develop and extract minerals from the site, the company committed to restore the mine site. Given the nature of open pit mining, it is not possible to fully restore the site to its original state. Nevertheless, the commitment requires the company to replant the area such that it will be suitable for wildlife and recreation (hiking, paddling, etc.). An independent environmental consultant hired by the mining regulator has estimated that the future site restoration costs will amount to $60 million at the end of the production life of the mine. Management estimates that the mine will begin production in the spring of 2025 and continue for 30 years. Beechnut has a March 31 year-end date and an incremental borrowing rate of 9%. Required a. Compute the present value of the future site restoration costs as of the spring of 2023. (Round your final answer to the nearest whole dollar.) $ 3,806,303 b. Compute the amount of depreciation expense related to the site restoration costs for the years ending 2024, 2025, and 2026 using the straight-line method. (For a depreciation amount with a $0 balance, make sure to enter "0" in the appropriate year.) Depreciation 2024 Depreciation 2025 Depreciation 2026
Transcribed Image Text:Beechnut Mines began developing an open pit copper and zinc mine in northern Ontario in April 2023. As part of the regulatory approvals to develop and extract minerals from the site, the company committed to restore the mine site. Given the nature of open pit mining, it is not possible to fully restore the site to its original state. Nevertheless, the commitment requires the company to replant the area such that it will be suitable for wildlife and recreation (hiking, paddling, etc.). An independent environmental consultant hired by the mining regulator has estimated that the future site restoration costs will amount to $60 million at the end of the production life of the mine. Management estimates that the mine will begin production in the spring of 2025 and continue for 30 years. Beechnut has a March 31 year-end date and an incremental borrowing rate of 9%. Required a. Compute the present value of the future site restoration costs as of the spring of 2023. (Round your final answer to the nearest whole dollar.) $ 3,806,303 b. Compute the amount of depreciation expense related to the site restoration costs for the years ending 2024, 2025, and 2026 using the straight-line method. (For a depreciation amount with a $0 balance, make sure to enter "0" in the appropriate year.) Depreciation 2024 Depreciation 2025 Depreciation 2026
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