=+6. On 1 January 2005, GOLD was granted a licence to commence mining for precious metals in the mountains of Mourne. Under the terms of the mining agreement, GOLD must restore the mountains to their original state at the end of licence period in five years time. The directors of GOLD estimate that the total cost of restoration will be

€20,000,000 of which 25% will be incurred during mining and the remainder when mining ceases. GOLD’s cost of capital is 10% and the risk-free rate is 4%. Mining commenced on 1 January 2005.