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  3. lifeline biofuels built an oil rig at a cost of $

Lifeline Biofuels built an oil rig at a cost of $ 8.5 million. The company...

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Accounting

Lifeline Biofuels built an oil rig at a cost of $ 8.5 million. The company estimates the oil rig will have a useful life of 20 years(with no salvage value), after which Federal regulations require that the oil rig must be dismantled and the land area restored. The fair value of the costs of this asset retirement project is $ 800 comma 000. The present value of these asset retirement costs is $ 250 comma 000 based on the6% afterminustax discount rate. Under U.S. GAAP, what is the initial capitalized carrying value of the oil rig at the completion of construction?
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Part 1
A.$ 8 comma 750 comma 000
$ 8 comma 750 comma 000
B.$ 510 comma 000
$ 510 comma 000
C.$ 8 comma 250 comma 000
$ 8 comma 250 comma 000
D.$ 8 comma 500 comma 000
$ 8 comma 500 comma 000

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