Computing present value of operating lease payments

Reference no: EM13827631

Problem:

1. Kling Technology disclosed the following minimum rental commitments under non-cancelable operating leases in its 2012 annual report:

Minimum operating lease payments	Amount (in millions)
2013	$ 86
2014	56
2015	44
2016	36
2017	32
2018	30
Total	$284

What is the present value of these operating lease payments, assuming a 6% discount rate?

2. Taylor's Corp. disclosed the following lease information in its 2011 annual report (in millions). What lease liability does Taylor's report on its balance sheet?

	Capital Leases	Operating Leases
2012	$1,000	$10,746
2013	1,000	11,022
2014	1,000	9,473
2015	1,000	8,841
2016	1,000	8,579
Thereafter	19,500	121,524
Total	24,500	$170,185
Amount representing interest	(11,578)
Net present value of leases	$ 12,922

Summary of problem:

These short answer questions is basically from Finance. The 1st question is about computing the present value of operating lease payments at 6% discount rate and the 2nd question is about computing the lease liability of a business.

Reference no: EM13827631

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