Santa Corporation
NOTE: These Multiple Choice Questions Require Present

Santa Corporation
NOTE: These multiple choice questions require present value information.
Santa Corporation manufactures Christmas decorations and supplies throughout the world. The company owns property, plant, and equipment and also enters into operating leases for certain facilities. Assume that Santa's incremental borrowing rate is 8%. The company's tax rate is 40%. Listed below is selected financial data for Santa and a portion of the company's operating lease footnote.
$\begin{array}{llll}&\underline{2012}&\underline{2011}&\underline{2010}\\\text { Property, Plant, \& Equipment (net) } &\$882,468&\$717,453&\$658,214 \\\text { Total Assets } &1,756,854 & \$ 1,405,484 & 1,254,896 \\\text { Common Shareholders'Equity } & 867,992&652,626&587,951 \\ & \\\text { Sales } & \$ 2,922,915 & \$ 2,415,632 \\\text { Cost of GoodsSold } & 2,016,811 & 1,642,630 \\\text { Depreciation Expense } & 78,584 & 67,542 \\\text { Interest Expense } & 106,663 & 90,343 \\\text { Net Income } & 248,448 & 217,407\end{array}$
$\begin{array}{|l|l|}\hline & \text { Sant Corp. } \\\hline & \text { Operating Lease Disclosure } \\\hline & \text { (amounts in thousands) } \\\hline & \\\hline & \text { Operating Lease Commitments } \\\hline & \text { at the end of } 2012 \\\hline & \\\hline & \\\hline \text { Year} & \text { Reported Lease Commitments } \\\hline 2013& \$ 148,239 \\\hline 2014 & \$ 252,800 \\\hline2015 & \$ 278,327 \\\hline 2016 & \$ 279,210 \\\hline 2017& \$ 285,452 \\\hline\text { Beyond } 2017 & \$ 2,471,600 \\\hline \end{array}$
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Using the information provided by Santa Corporation estimate the average life of the operating leases.

A) 8.66 years
B) 13.66 years
C) 10 years
D) Not able to determine