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a company in 5 years time will have to pay environmental costs of $5m.
PV $5m and relevant discount rate is 10%Therefore the provision for 5 years will be made for:
$5m x 0.62092 = 3,104,600and the provision for the following year will be:
$5m x 0.68301 (disc. for 4 years)= 3,415,050How will found the amounts of “0.62092 and 0.68301”?
Thank you
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