Nuclear Power Plants Are Required to Have Full Decommissioning Costs

Nuclear power plants are required to have full decommissioning costs accumulated during the useful life of the plant. The new nuclear plant at Darlington is designed for 60 years of operational life starting in 2025. OPG plans to set aside $1 million per month during the operation of the plant. What is the value of this annuity in 2025, if OPG uses Ontario's recommended discount rate of 2.5% compounded monthly?

A) $373 million
B) $1668 million
C) $720 million
D) $67 million
E) $158 million

Correct Answer:

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