Question $1$

A company paid $$2,000,000$ in year $1$ for the mining site and spent an additional $$500,000$ to

prepare the mine for extraction of the copper. After the copper is extracted in approximately.

four years, the company is required to restore the land to its original condition, including

repaving of roads and replacing a greenbelt. The company has provided the following three

cash flow possibilities for the restoration costs:

To aid extraction, Falcon purchased some new equipment on July $1,$ year $1,$ for $$150,000.$

After the copper is removed from this mine, the equipment will be sold. The credit$-$adjusted,

risk$-$free rate of interest is $10\%.$ PV factor $(n=4,I=10\%)$ is $.68301.$

Required: What is the cost of the mine? $($Round to nearest dollar$)$