Santa Corporation
NOTE: These Multiple Choice Questions Require Present Value

question 61

Multiple Choice

Santa Corporation
NOTE: These multiple choice questions require present value information.
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.
$\begin{array}{lrrr}&2012&2011&2010\\\text { Property, Plant, \& Equipment (net) } & \$ 882,468 & \$ 717,453 & \$ 658,214 \\\text { Total Assets } & 1,756,854 & 1,405,484 & 1,254,896 \\\text { Common Shareholders' Equity } & 867,992 & 652,626 & 587,951\end{array}$


$\begin{array}{lrrrr}\text { Sales } & \$ 2,922,915 & \$ 2,415,632 & \\\text { Cost of Goods Sold } & 2,016,811 & 1,642,630 & \\\text { Depreciation Expense } & 78,584 & 67,542 & \\\text { Interest Expense } & 106,663 & 90,343 & \\\text { Net Income } & 248,448 & 217,407 &\end{array}$

sante corp.
Operatine Laraca Disclasure (anounts in thausands)
Operating Lease Camnitsents at the end of 2012
$\begin{array}{rc}{\text { Year }} & \text { Reported Lease Commitments } \\\hline 2013 & \$ 148,239 \\2014 & \$ 252,800 \\2015 & \$ 278,327 \\2016 & \$ 279,210 \\2017 & \$ 285,452 \\\text { Beyond } 2017 & \$ 2471,600\end{array}$

-Using the information provided by Santa Corporation,calculate the present value of the operating leases.

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Definitions:

Cognitive Schema

Mental structures that organize our knowledge, beliefs, and expectations based on past experiences.

Deep-Seated Belief

A strongly held conviction or principle that is deeply ingrained in an individual's thought patterns, often affecting behavior.

Developmental History

involves the comprehensive record of an individual's physical, emotional, and psychological development from birth to the current age, used often in psychological assessments.

Consequences

Outcomes or effects that result from a specific action or set of conditions.