Question

On July 15, 2019 HMS paid $360 Million cash for a Thallium smelter. The company engineers estimated that the facility would have a fourteen-year service life and that its retirement in accordance with then-current state regulations would cost $70 million. The risk-free rate was 2.8% and HMS, a single credit-B credit, expects a 750 bps credit spread to rF

On March 1, 2025 HMS sold the smelter for $190 million. The buyer paid cash and assumed the ARO.

Book the 2025 03 01 transfer. Assume that HMS accountants depreciated the smelter SLN with zero salvage, that discounting was calculated on a continuously compounded basis and that discounting was calculated on a continuously compounded basis and that the ARO assumptions have not changed.