7.18 Effect of Capitalizing Operating Leases on Balance Sheet Ratios. Some retailing companies own their own stores or acquire their premises under capital leases. Other retailing companies acquire the use of store facilities under operating leases, contract ing to make future payments. An analyst comparing the capital structure risks of retailing companies may want to adjust reported financial statement data to put all fims on a comparable basis. Certain data from the financial statements of Gap Inc. and Limited Brands follow (amounts in millions). Balance Sheet as of January 31, 2009 Gap Inc Limited Brands Current liabilities Long-term debt Other noncurrent liabilities Shareholders' equity $2,158 1,019 4,387 $7,564 $1,255 2,897 946 1,874 $6,972 Total Minimum Payments under Operating Leases 2009 2010 2011 2012 2013 After 2013 1,069 927 712 520 386 1,080 $4,694 478 455 416 373 341 1,334 $3,397 Total REQUIRED a. Compute the present value of operating lease obligations using an 8% discount rate for Gap Inc. and Limited Brands as of January 31, 2009. Assume that all cash flows occur at the end of each year. Also assume that the minimum lease payment each year after 2013 equals $360 million per year for three years for Gap Inc. and $333.5 million for four years for Limited Brands. (This payment scheduling assumption can be obtained by assuming