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Cabela's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2015 annual report (in millions). Operating Leases 2016 $ 24,424 2017 25,245 2018 25,065 2019 24,682 2020 24,087 Thereafter 292,668 Total $416,171 What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0% and round the remaining lease term to the nearest whole year.

A. $233,357 million
B. $ 15,113 million
C. $255,007 million
D. $373,713 million
E. None of the above

Respuesta :

Answer:

option (E) None of the above

Explanation:

Data provided in the question:

Discount rate = 6%

Discounting factor = [ 1 ÷ (1 + r)ⁿ]

here, n is the year

Present value = Cash flow × Discounting factor

Now,

Year       cash flow           Discounting factor       Present value

2016      $24,424                    0.9434                   $23,041.60

2017      $25,245                    0.8899                   $22,465.5255

2018      $25,065                    0.8396                   $21,044.574

2019      $24,682                    0.792                      $19548.144

2020     $24,087                    0.7472                     $17997.8064

2021      $292,668                  0.7049                    $206301.6732

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                                                                               = $310,399.3231

Hence,

The answer is option (E) None of the above