McDonalds Corp. was the lessee at 14,139 restaurant locations through ground leases at December 31, 2011. The lease terms are generally for 20 years.

The company is also the lessee under noncancelable leases covering certain offices and vehicles. The companys footnotes also revealed that at year-end 2011, the minimum lease commitments under noncancelable operating leases were:

In millions	Restaurant	Other	Total
2012	$1,172.6	$74.4	$1,247.0
2013	1,104.8	62.8	1,167.6
2014	1,019.50	55.4	1,074.9
2015	921.9	43.1	965.0
2016	813.9	37.9	851.8
Thereafter	6,039.1	208.8	6,247.9
Total minimum payments	$11,071.8	$482.4	$11,554.2

The following represents a condensed balance sheet for McDonald's for 2011:

MCDONALD'S CORPORATION Consolidated Balance Sheet
($ millions)	2011
Assets
Current Assets	$4,403.0
Noncurrent Assets	28,586.9
Total assets	$32,989.9
Liabilities and Shareholders' equity
Current liabilities	$3,509.2
Long-term debt	12,133.8
Other noncurrent liabilities	2,956.7
Shareholders' equity	14,390.2
Total liabilities and Shareholders' equity	$32,989.9

Required

1. Calculate the present value of the company's operating leases assuming an interest rate of 6%.

Hint - Assume any "thereafter" amount is straight-lined over the remaining lease period using the 5th year (2016) lease payment, with the final year amount as a plug figure to reconcile to the total future minimum lease payments. Use Excel or a financial calculator for your computations. Do not round until your final answer. Round your answer to the nearest million dollars.

$Answer million

2. Restate the company's balance sheet assuming that all operating leases are capitalized. Use Excel or a financial calculator for your computations. Do not round until your final answer for each account balance. Round your answers to the nearest million dollars.

MCDONALD'S CORPORATION Consolidated Balance Sheet
($ millions)	2011
Assets
Current Assets	$Answer
Noncurrent Assets	Answer
Total assets	$Answer
Liabilities and Shareholders' equity
Current liabilities	$Answer
Long-term debt	Answer
Other noncurrent liabilities	Answer
Shareholders' equity	Answer
Total liabilities and Shareholders' equity	$Answer

3. Calculate the:

(a) Long-term debt to shareholders' equity ratio, both with and without capitalization of operating leases.

For your calculations, use the amounts as they appear in the above balance sheets. Answer in a percent rounded to one decimal place. Hint: To calculate ratio, use long-term debt amount only (do not include current portion).

(a) With operating lease capitalization	Answer	%
(b) Without operating lease capitalization	Answer	%

(b) Total debt to total assets ratio, both with and without the capitalization of the operating leases.

For your calculations, use the amounts as they appear in the above balance sheets. Answer in a percent rounded to one decimal place.

(a) With operating lease capitalization	Answer	%
(b) Without operating lease capitalization	Answer	%