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Driver Enterprises just reported earnings before interest and taxes (EBIT) of $459 million and interest expense of $52 million, Included among its reported operating expenses
Driver Enterprises just reported earnings before interest and taxes (EBIT) of $459 million and interest expense of $52 million, Included among its reported operating expenses were lease rental expenses of $154 million. Using footnote data and a discount rate of 4% you have determined the present value of the company's future lease obligations to be $549 million. When calculating coverage ratios and similar measures, by how much (in $ million, rounded to one decimal place, e.g., $12.3 ) was interest expense "underreported" on the income statement by not separately accounting for the financing charges embedded within the lease payments
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