Question
On 1 January 2015, Russi Ltd constructed an electricity plant. The cost of the building and associated technology was $1,000,000. The license to operate and
On 1 January 2015, Russi Ltd constructed an electricity plant. The cost of the building and associated technology was $1,000,000. The license to operate and architects fees amounted to $500,000. The dismantling cost was expected to be $800,000 at the end of plants 10-year useful life. The discount rate was 10%.
The residual value is expected to be $8,435. The plant is expected to generate benefits evenly throughout the years. At the end of 2018, it sells the plant for $1,000,000 cash.
What is the initial cost of the plant?
A.
None of the above
B.
$1, 308, 434
C.
$1, 808, 434
D.
$2, 300, 000
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