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On 1st october 2010 borough extracted commenced extraction of crude oil under a ten year license worth 50 million. there is constructive obligation to clean the site worth 20 million and 2 cents for every barrel. 150 million barrels are extracted discounted at 8%
In the answer why calculating provision they took it as
(20 million + 150 million x .02) x 1.08 for the provision
Shouldnt we bring that amount to the present value by discounting it by the discounting rate over 10 years?
What does this sentence mean as quoted from the question?
“Both of these amounts are based on their present values as at 1 October 2010 (discounted at 8%) of the estimated costs in 10 years’ time.”
I’m very tensed right now and must have missed it completely.
Sorry for the inconvenience
As I’ve just said in my reply to your previous question, “Get some sleep”
You’re now wasting your time and spoiling your chances of success by pushing your body to extremes where it is uncomfortable.
STOP! NOW!!!!
GO TO BED!!!!!!
SLEEP!!!!!!!!!!!!!!
And DO not take your books to the exam centre in the morning! It’s a waste of time and it gives a total opportunity for you to confuse yourself.
DON’T DO IT!
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