(Answered) Smithson mining operates a silver mine in nevada

Accounting

Smithson Mining operates a silver mine in Nevada. Acquisition, exploration, and development costs totaled $7.4 million. After the silver is extracted in approximately five years, Smithson is obligated to restore the land to its original condition, including constructing a wildlife preserve. The company's controller has provided the following three cash flow possibilities for the restoration costs: (1) $680,000, 15% probability; (2) $730,000, 45% probability; and (3) $830,000, 40% probability. The company's credit-adjusted, risk-free rate of interest is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

What is the initial cost of the silver mine?

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