Question
Tilton Company purchased a hazardous chemical detoxification facility for $1,700,000 on April 1, 2019. Tilton agreed to pay $500,000 cash and issued a promissory note
Tilton Company purchased a hazardous chemical detoxification facility for $1,700,000 on April 1, 2019. Tilton agreed to pay $500,000 cash and issued a promissory note for the balance. The annual interest rate for the note is 8% and interest is payable annually, on the anniversary date of the purchase. The note matures on April 1, 2023. | |||||||||||||||||||||||||||||||||||||||||||||
As part of the purchase agreement, Tilton has agreed to assume responsibility for the restoration of the property following the closure and decommissioning of the facility. The initial estimated cost to clean up contamination caused by the location of hazardous chemicals on the property is $1,100,000 (based on the probabilities of the various estimated cash outflows considered), expected to be incurred in 11 years upon the anticipated closure and decommissioning of the facility. Additional contamination will likely occur each year the plant is in operation. In its first year of operation, additional contamination is expected to add $200,000 (again based on probabilities of estimated cash flows) to the estimated cleanup cost, which would then occur after 10 years because one year of the expected 11 total years of operation will have elapsed.
there are 130 more rows(132 total) but I didnt include them since it was too long. |
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