Old Tucson Corporation (OTC) paid $200 million for the right to explore and extract rare metals from land owned by the state of Texas. To obtain the rights, OTC agreed to restore the land to a suitable condition for other uses after its exploration and extraction activities. OTC incurred exploration and development costs of $60 million on the project. OTC has a credit-adjusted risk free interest rate is 7%. It estimates the possible cash flows for restoring the land, three years after its extraction activities begin, as follows: (PV of $1, PVA of $1) (Use appropriate factor(s) from the tables provided.)

Cash Outflow				Probability
$	26	million			30	%
$	78	million			70	%

The asset retirement obligation (rounded) that should be reported on OTC's balance sheet one year after the extraction activities begin is: (Round your intermediate and final answer to one decimal place.)

Multiple Choice

• $50.9 million.

• $54.5 million.

• $58.1 million.

• $0.