Analyzing and Interpreting Footnote on Operating and Capital Leases Verizon Communications, Inc., provides the following footnote relating to its leasing activities in its 10-K report. The aggregate minimum rental commitments under noncancelable leases for the periods shown at December 31, 2015, are as follows: Years ($ millions) 2016 2017 2018 2019 2020 Thereafter Total minimum rental commitments Capital Leases Operating Leases $2,744 2,486 2,211 1,939 1,536 7,297 $18,213 $302 278 187 97 45 159 1,068 Less interest and executory costs Present value of minimum lease payments Less current installments 957 271 $686 Long-term obligation at December 31, 2015 (a) Using your financial calculator or Excel Spreadsheet, confirm that Verizon capitalized its capital leases using a rate of 3.85% Amount IRR 0 0 X 3.85 % 302 278 87 4 97 45 159 X 0 X (c) Compute the present value of Verizon's operating leases, assuming an 3.85% discount rate and rounding the remaining lease term to 3 decimal places. (Use a financial calculator or Excel to compute. Do not round until your final answers. Round each answer to the nearest whole number.) ($ millions) Present Value Year 1 Year 2 Year 3 Year 4 Year 5 0 X After 5 Total *(Use subsequent rounded answers for calculation.) ,242.5