Retail Inc A Obtain a Crude Estimate of the Remaining Length of a Portion

question 86

Essay

Retail Inc. has both operating and capital leases. Below is a portion of its lease footnote taken from its 2006 financial statements.
$\begin{array}{lrr}&\text { Capital}&\text { Operating }\\\text { MLP (in millions) }\\2007 & \$ 233 & \$ 529 \\2008 & 201 & 567 \\2009 & 199 & 554 \\2010 & 180 & 540 \\2011 & 145 & 528 \\ \underline{\text { Thereafter }} & \underline{1,050} & \underline{5,941} \\ \text { Total MLP } &2,008 & \underline{ \underline{\$ 8,659}}\\\text { Less interest } & \underline{ 680} \\\text { Present value of MLP } & \underline{ \underline{ \$ 1,328 }}\\\text { Current } & 100 \\\text { Long term } & \$ 1,228\end{array}$

a. Obtain a crude estimate of the remaining length of the operating and capital leases.
b. Estimate the interest rate implicit in the capital leases.
c. Compute the present value of the operating leases.

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Definitions:

High-Pitched Voice

A vocal tone characterized by higher frequencies, typically associated with smaller vocal cords or heightened emotions.

Simple Words

Utilization of words that are easy to understand or communicate, typically used to ensure clarity or inclusiveness in communication.

Repetition

The action of repeating something that has already been said or written, often for emphasis or to aid memorization.

Vocabulary Explosion

A rapid increase in the number of words a child learns and uses, commonly observed between the ages of two and three.