Compute the present value of Costco's operating lease payments after 2015?

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Business Finance

Description

Compute the present value of Costco's operating lease payments, assuming a 5% discount rate, after  2015 and round the remaining lease term to the nearest whole year.

Future minimum payments

2015 = 111

Thereafter = 1,451

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Explanation & Answer

There is no mention about the number of years. 

I have done it for 10 years' lease, 20 years' lease and 30 years' lease

The present values are as follows:

10              $11,315.24

20              $18,193.67

30              $22416.43

The formula supplied to excel is 

- pv(.05,10,-1451)+111 

- pv(.05,20,-1451)+111 

- pv(.05,30,-1451)+111 


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