Question

In: Finance

n a footnote on its 2019 annual report Hewlett Packard reported the following operating lease obligations...

n a footnote on its 2019 annual report Hewlett Packard reported the following operating lease obligations (in $ millions): Year Amount 2020 9,087 2021 8,498 2022 7,460 2023 4,514 2024 3,306 Calculate the present value of the future operating lease obligations, assuming a discount rate of 12%.

Solutions

Expert Solution

operating lease obligations (in $ millions): Year Amount 2020 9,087 2021 8,498 2022 7,460 2023 4,514 2024 3,306 Calculate the present value of the future operating lease obligations, assuming a discount rate of 12%.

Here 0th year ( present year ) = 2019

Calculate the present value on 2019

every future value is discounted using 12% to 2019. current period (present period)

PV = amount * ( 1 / 1 + r )^n

Year

Cash flow (fv)

PV of $1 factor @discounted using 12%

PV of CF

2020

9087

(1 / 1 + 11%)^1     

= 0.9009

8186.47

2021

8498

(1 / 1 + 11%)^1     

=0.81162

6897.15

2022

7460

(1 / 1 + 10.1%)^1     

=0.7312

5454.75

2023

4514

(1 / 1 + 11%)^1     

=0.6587

2973.37

2024

3306

(1 / 1 + 11%)^1     

=0.5935

1962

Total PV of future cash flow = 25474 million

present value on 2019, the future operating lease obligations = $ 25474 million


Related Solutions

Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October...
Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October 31 (in millions) 2015 2014 Accounts receivable $13,363 $13,832 Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2015 2014 2013 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $232 $332 $464 Provision for doubtful accounts 46 25 23 Deductions, net of recoveries (89) (125) (155)...
Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October...
Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October 31 (in millions) 2015 2014 Accounts receivable $13,363 $13,832 Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2015 2014 2013 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $232 $332 $464 Provision for doubtful accounts 46 25 23 Deductions, net of recoveries (89) (125) (155)...
Interpreting the Accounts receivable Footnote Hewlett-Packard Company (HPQ) reports the following in its 2010 10-K report....
Interpreting the Accounts receivable Footnote Hewlett-Packard Company (HPQ) reports the following in its 2010 10-K report. October 31 (in millions) 2010 2009 Accounts receivable, net $18,481 $16,537 HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2010 2009 2008 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $ 629 $ 553 $ 226 Increase in allowance from acquisition 7 -- 245 Addition...
The following information is taken from the 2010 annual report to shareholders of Hewlett-Packard (HP) Co.
The following information is taken from the 2010 annual report to shareholders of Hewlett-Packard (HP) Co.Required: a/ What is the balance in HP's allowance for doubtful accounts at the end of the fiscal years 2010 and 2009, respectively?b/ What kind of account is the provision for doubtful accounts in HP's financial statements? (Note: Provision for doubtful accounts is synonymous with bad debt expense; that is, the charge against income for estimated uncollectible accounts from credit sales in that period) c/ Using a...
Question text Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K...
Question text Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October 31 (in millions) 2015 2014 Accounts receivable $13,363 $13,832 Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2015 2014 2013 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $232 $332 $464 Provision for doubtful accounts 46 25 23 Deductions, net of recoveries (89)...
Analyzing and Interpreting Restructuring Costs and Effects Hewlett-Packard, Inc., reports the following footnote disclosure (excerpted) in...
Analyzing and Interpreting Restructuring Costs and Effects Hewlett-Packard, Inc., reports the following footnote disclosure (excerpted) in its 2010 10-K relating to its restructuring programs. Fiscal 2010 Acquisitions: On July 1, 2010, HP completed the acquisition of Palm and initiated a plan to restructure the operations of Palm, including severance for Palm employees, contract cancellation costs and other items. The total expected cost of the plan is $46 million. On April 12, 2010, HP completed the acquisition of 3Com. In connection...
Hewlett-Packard Company (HPQ) reports the following in its 2007 10-K report. October 31 (in millions) 2007...
Hewlett-Packard Company (HPQ) reports the following in its 2007 10-K report. October 31 (in millions) 2007 2006 Accounts receivable, net $13,420 $10,873 HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2007 2006 2005 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $ 220 $ 227 $ 286 Increase in allowance from acquisition 3 4 -- Addition of bad debts provision 32...
Hewlett-Packard is a large, successful company with over $31 billion in 1995 revenues. Its fast annual...
Hewlett-Packard is a large, successful company with over $31 billion in 1995 revenues. Its fast annual revenue growth approximately 30% from such a large base has astounded observers. The company competes in many markets, including computers and peripheral equipment, test and measurement devices, electronic components, and medical devices. It has 110,000 employees and over 400 locations around the world. HP is known for its relaxed, open culture. All employees, including the CEO, work in open cubicles. Many employees are technically-oriented...
Rosebud Corp. reported the following itmes in the 2019 pension footnote for its defined benefit plan....
Rosebud Corp. reported the following itmes in the 2019 pension footnote for its defined benefit plan. Service Cost - 1610 Benefits paid to retirees - 220 Interest Cost - 780 Actual returns on pension plan assets - 1140 Expected returns on pension plan assets - 1200 Amortization of deferred costs - 62 How much is the company's pension expense for the year?
Operating Expenses Target Corporation’s footnote from its 2015 annual report table illustrates the primary items classified...
Operating Expenses Target Corporation’s footnote from its 2015 annual report table illustrates the primary items classified in each major expense category: cost of sales (COS), or selling, general and administrative (SG&A). For each expense, indicate whether the item would be included in COS or SG&A. Expense Category a.    Advertising expenses AnswerSG&ACOS b.    Compensation and benefit costs for headquarters employees AnswerSG&ACOS c.    Compensation and benefit costs for store employees AnswerSG&ACOS d.    Compensation and benefits costs for distribution center employees AnswerSG&ACOS e.   ...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT