Estimate the average life of the operating leases

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Santa Corporation manufactures Christmas decorations and supplies throughout the world. The company owns property, plants, and equipment and also enters into operating leases for certain facilities. Assume that Santa's incremental borrowing rate is 8%. The company's tax rate is 40%. Listed below are selected financial data for Santa and a portion of the company's operating lease footnote.

Problem 1. Using the information provided by Claus Corporation, estimate the average life of the operating leases.

Problem 2. Using the information provided by Claus Corporation, calculate the present value of the operating leases.

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Reference no: EM132843612

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