Libom Ltd. purchase a drill for raw materials on 1/7/14. Cost of drill is $3,455,000. Installation costs are the following:

Site access costs $1,548,000

Transportation of drill 330,500

Set-up 190,000

Licence/consent 854,900

Engineers fees 250,000

Total $3,173,400

Dismantling costs $ 110,500 (in 6 years time)

Site clean-up 1,749,000

Transport costs 285,000

Replacement-Flora 427,700

Total $2,572,200

Costs to be over life of the mine. Discount rate is 9%.