The Winderl Mining Co. paid $50 million for the right to explore and extract copper from land owned by the state of Wyoming. To obtain the rights, Winderl agreed to restore the land to a suitable condition for other uses after its exploration and extraction activities. Winderl incurred exploration and development costs of $15 million on the project. The company's credit-adjusted risk-free interest rate is 6%. It estimates the possible cash flows for restoring the land, three years after its extraction activities begin, as follows:

Cash outflow Probability $ 5 million 40% $10 million 60%

What is the initial cost of the copper mine?

1. $65,000,000
2. $73,000,000
3. $71,716,960
4. $95,000,000