Question
Company A expects the following cash flow related to the retirement of its coal reserve: Cash Outflow Probability $10 million 60% $30 million 40% What
Company A expects the following cash flow related to the retirement of its coal reserve:
| Cash Outflow | Probability |
| $10 million | 60% |
| $30 million | 40% |
What is the expected value of this future cash flow?
If the retirement of the coal reserve is 2 years from now (12/31/2022), assume 10% interest rate, what dollar amount should the company report as the asset retirement obligation today?
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Accounting Principles Volume 1
Authors: Jerry A. Weygandt, Paul D. Kimmel, Donald E. Kieso
11th Edition
1118751752, 978-1118751756
