Adjusting PP&E Turnover for Right$-$of$-$Use Assets

Five Below's financial statements report the following for fiscal year $1($FY$1)$ through fiscal year $3($FY$3).$

$ thousandsFY$3$FY$2$FY$1$PP&E$,$ net$$925,530$$$777,497$$$565,351$Right$-$of$-$use assets $($ROU$),$ net$*1,319,1321,151,395975,862$Sales$3,076,3082,848,354*$Not included in PP&E

a$.$ Compute the PP&E turnover ratio for FY$3$ and FY$2.$

NumeratorDenominatorResultAnswer $1$Average PPEPPE, end of yearPPE, beginning of yearSalesAnswer $2$Average PPEPPE, end of yearPPE, beginning of yearSalesPPE TurnoverFY$3$Answer $3$Answer $4$FY$2$Answer $5$Answer $6$

b$.$ Adjust PP&E to include ROU assets. Then recompute PP&E turnover for FY$3$ and FY$2.$

NumeratorDenominatorResultFY$3$Answer $7$Answer $8$FY$2$Answer $9$Answer $10$

c$.$ Which of the following best describes the impact of the adjustment in part b to PP&E turnover?

Answer $11$InconsequentialModerateSubstantial