Verizon Communications, Inc., provides the following footnote relating to leasing activities in its 10-K report. a. Using
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Verizon Communications, Inc., provides the following footnote relating to leasing activities in its 10-K report.
a. Using your financial calculator or Excel spreadsheet, confirm that Verizon capitalized its capital leases using a rate of \(9.44 \%\).
b. What effect does the failure to capitalize operating leases have on Verizon's balance sheet? Over the life of its leases, what effect does this lease classification have on net income?
c. Compute the present value of Verizon's operating leases, assuming a \(9.44 \%\) discount rate and rounding the remaining lease life to three decimal places. How might we use this additional information in our analysis of the company?
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Financial And Managerial Accounting For MBAs
ISBN: 9781618533593
6th Edition
Authors: Peter D. Easton
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