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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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