Lowe's Companies, Inc., reports the following footnote relating to its leased facilities in its (200710-mathrm{K}) report. The
Question:
Lowe's Companies, Inc., reports the following footnote relating to its leased facilities in its \(200710-\mathrm{K}\) report.
The future minimum rental payments required under capital and operating leases having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows:
a. Assuming that this is the only information available about its leasing activities, docs Lowe's have any capital leases in 2007? Explain.
b. What effect has its lease classification had on Lowe's balance sheet? Over the life of the lease. what effect does this classification have on net income?
c. Compute the present value of these operating leases using a discount rate of 6%. How might we use this information in our analysis of the company?
Step by Step Answer:
Financial Accounting For MBAs
ISBN: 9781934319345
4th Edition
Authors: Peter D. Easton, John J. Wild, Robert F. Halsey, Mary Lea McAnally