Question: How to get the 512.91? I couldn't understand the notes below the table. Could you please show me detailes of how to discount back 5
How to get the 512.91? I couldn't understand the notes below the table. Could you please show me detailes of how to discount back 5 periods at 4.5%?

Southwest Operating Lease Capitalization: 2008 Operating Lease Present Value Present Year Commitments Factor at 4.5% Value 2009 S 376 .9569 $ 359.79 2010 324 .9157 296.69 2011 249 .8763 218.20 2012 203 8386 170.24 2013 152 .8025 121.98 After 2013 728 512.91 Total $ 2.032 $ 1,679.81 *Present value of an annuity of $145.6 million for five periods at 4.5 percent; then that present value is discounted back five periods at 4.5 percent. Estimate of number of years beyond 2013: $728/152 = 4.79 years; assuming five year payment of $728/5 years = $145.6 million
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
