Hello,

I am not sure how to find the fair value of fixed-rate and variable-rate debt. Please help, thank you!

h. Refer to Note 20, Financial Instruments. i. What is the fair-value of Rite Aid's fixed-rate debt at February 28, 2004? Why does it differ from the carrying amount? What is the fair-value of the variable-rate debt at February 28, 2004? Why does it not differ from its carrying amount? Why would financial statement users want to know the fair-value of Rite Aid's debt? 20. Financial Instruments The carrying amounts and fair values of financial instruments at February 28, 2004 and March 1, 2003 are listed as follows: 2004 2003 Carrying Fair Carrying Fair Amount Value Amount Value Variable rate indebtedness. .......... $1,150,000 $1,150,000 $1,372,500 $1,372,500 Fixed rate indebtedness.... .. $2,558,497 $2,640,995 $2,313,942 $2,027,603 Cash, trade receivables and trade payables are carried at market value, which approximates their fair values due to the short-term maturity of these instruments. The following methods and assumptions were used in estimating fair value disclosures for financial instruments: LIBOR-based borrowings under credit facilities: The carrying amounts for LIBOR-based borrowings under the credit facilities, term loans and term notes approximate their fair values due to the short-term nature of the obligations and the variable interest rates. Long-term indebtedness: The fair values of long-term indebtedness is estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics