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.

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

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

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. 2012 2011 2010 Property, Plant, & Equipment (net) $ 882 468 $ 717 453 $ 658,214 Total Assets 1,756,854 1,405,484 1,254,896 Common Shareholders' Equity 867,992 652,626 587,951 Sales $2,922,915 $2,415,632 Cost of Goods Sold 2,016,811 1,642,630 Depreciation Expense 78,584 67,542 Interest Expense 106,663 90,343 Net Income 248,448 217,407 O Claus Corp. Operating Lease Disclosure (amounts in thousands) Operating Lease Commitments at the end of 2012 Year Reported Lease Commitments 2013 $148,239 2014 $252,800 2015 $278,327 2016 $279,210 2017 $285,452 Beyond 2017 $2,471,600