 The estimated future cost of removing the tanks in 40 years is $15,000 * (1.025 ^ 40) = $40,275.96.The present value of this cost is $40,275.96 / (1.09 ^ 40) = $1,282.29.At installation of the tanks, the company books an asset retirement cost (asset) and an asset retirement obligation (liability) of $1,282.29.