Question

# Coach Inc. reports the following in its 2015 Form 10-K. The Company leases retail, distribution and...

Coach Inc. reports the following in its 2015 Form 10-K. The Company leases retail, distribution and office facilities, which expire at various dates through 2036. Future minimum rental payments under non-cancelable operating leases, as of July 2, 2016, are as follows: Fiscal Year Amount (millions) 2017 \$254.2 2018 232.4 2019 209.4 2020 181.4 2021 150.4 Subsequent to 2021 597.4 Total minimum future rental payments \$1,625.2 Assume that the appropriate discount rate for the operating leases is 5%. Use a financial calculator to determine the present value of the future minimum operating lease payments. Round remaining life to the nearest whole number. Round answer to two decimal places.

CALCULATION OF PRESENT VALUE IN OPERATING LEASE

 YEAR FISCAL AMOUNT DISCOUNT RATE (5%) PRESENTB VALUE 2017 \$ 254.2 0.952 241.99 2018 \$ 232.4 0,907 210.78 2019 \$ 209.4 0.863 180.71 2020 \$ 181.4 0.822 149.11 2021 \$ 150.54 0.783 117.87 2022 \$ 597.4 0.746 445.66 2023 \$ 1625.2 0.710 1153.89 2024 \$ 1625.2 0.676 1098.63 2025 \$ 1625.2 0.644 1046.62 2026 \$ 1625.2 0.613 996.24 2027 \$1625.2 0.584 949.11 2028 \$ 1625.2 0.556 903.61 2029 \$1625.2 0.530 861.35 2029 \$1625.2 0.505 820.72 2030 \$1625.2 0.481 781.72 2031 \$1625.2 0.458 744.34 2032 \$1625.2 0.436 708.58 2033 \$1625.2 0.415 674.45 2034 \$1625.2 0.395 641.95 2035 \$1625.2 0.376 611.07 2036 \$1625.2 0.358 581.82 14,869.46

TOTAL PRESENT VALUE IS 14,869.46

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